Crop insurance was never desigened to make a profit for the farmer, just put money back in him pocket so he could farm again, or not loose the operation.
Self insuring, like you suggest is OK, if you can survive long enough to put a nest egg aside. Which most people can't.
So you stick your premium in a piggy bank for 4 years and think you are getting along pretty good, then year five you have a total loss. How many years does it take you to recover and get back to where you were?
So lets say your crop ins. premium for corn was $25 an acre (not saying it is that much). So by not having crop ins. for 4 years you have $100/ acre put in the piggy bank. But year 5 you are wiped out. Crop ins. would have paid you like $475 an acre. So you about broke even, with just $75 in the hole, so you start building up the piggy bank again, but this time disaster strikes only 2 years later. Now what?
And that doesn't take into account that the crop ins. has some replant coverage built in, and prevented planting built in.
It must make a lot of folks sleep better at night if 86% of the acreage is insured.
I would say that if all your land and machinery is paid for, and you dont have an operating loan to speak of, then self insuring would be the way to go.
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