Agricultural Insurance is an agreement that provides farmers with financial protection against production losses caused by natural causes, such as drought, excessive moisture, wind and wildlife. It is an important tool for risk management tool in a sense that if a loss occurs, the farmer will be reimbursed as soon as feasible to the amount of the loss, allowing him or her to return to business.
What are the benefits of Agricultural Insurance?
- Financial compensation in the event of loss
- Stabilization of farmer’s income
- Technical advisory services
- Collateral security for loans
financial compensation in the event of loss
one of the advantages of having an agricultural insurance is majorly protection from any loss incurred due to unforeseen circumstances such as flood, earth quake , wind e.t.c the insurance company bears the loss that the farmer incurred due to natural disaster and other factors.
Stabilization of farmer’s income
Agricultural insurance protects famers from unforeseen circumstances that may affects the famers output or income. This can be done by providing loans to famers to stabilize their production or insuring the famers inputs .
Technical advisory services
Insurance companies also provides advisory services to famers on how to effectively utilize their insurance subscription .Famers are also provided with extension agents to teach them new technologies to improve output.
Collateral security for loans
Farmers can use their insurance plan as a collateral to request for loans as a form of security. Farmers can have access to loans that will help increase his productivity.
some of the most common agricultural insurance companies are ;