The Brattleboro daily reformer. (Brattleboro, Vt.) 1913-1955, 1922-07-17
SOUND CROP INSURANCE.
Eight Points Are Laid Dawn as Neces-
sary to a Contract.

sary to a Contract
In all probability the ultimate form
of crop insurance contract still remains
to be devised, saws n n. VaIgren in a
survey Of the subject for the depart.
mcnt Of agriculture at Washington He
points out that eight principles are fun,
damental 10 a sound plan.
Tie Insurance must cover only such
crop damages as viii result in serious
financial loss to the farmer This means
that only reasonable amount of in
SuraHce an acre must be written. For
establishing such reasonable amount the
average yield and price for 4 series Of
past years is perhaps the best basis. 1t
means, furthermore, that the acreage of
q given crop, of not the entire farm.
must be insured as a unit and adjust
meut made on the basis of average yield
Of such acreage. The total loss of crop
on enc or a few acres out Of a hundred
Is not serious loss if The acreage as a
whole gives average returns or sub.
stantial part Of such average.
The insurance must cover any and all
hazards which are beyond the farmers
control. Insurance which protects
against certain hazards ard leaves the
insured exposed to total loss from other
hazards beyond his control is not real
crop insurance.
In no case must the Insurance pro-
tect against loss from carelessness or
negligence on the part of the insured.
Such protection would involve a moral
hazard the encouragement of which is
against the best interest not only of the
company but also of the insured.
The premium, or cost Of insurance.
must bear a reasonable relationship TO
the value OF the protection that it pur-
chaSes. This means that the expense
item i'm tie expenditure Of the insurance
organization must be held to a minor
part Of the premiums collected; that
profits. if the organization operates for
profit, must be moderate, and that the
bulk Of the premiums must be available
for the payment of current losses and
IN favorable years for additions TO a re-
serve for the payment of future losses.
The method of adjusting loss must be
such that the insured viii receive in
Gcmnity for crop damage in the amount
or ON the basis that he is led to expect
from the figures indicating The amount
OF insurance an acre. The company
should not profit by a calamity to the
farmer in the form OF reduced prices for
his product.
An early adjustment should be pro
vided for i'm case Of total failure of an
insured crop or such an approximation
to fail"rc that it w0uld not pay to ma
ture ard h2rvost the crop. The part of
the income or yield guaranteed by the
contract, which becomes due under such
circumstances, should be plainly stated
and should not exceed the value of the
labor and other costs, including rental.
that are actually lost to the insured III
connection with the crop.
All adjustments involving only par
tial damage should. so far as possible,
be left unit after the crop has been har-
vested and put into marketable form
so that quantity and grade can be de
tcrmined. This makes possible economy
in adjustment of pxOpOSpS
There must be a certain degree of I'M
derstanding between the farmer and the
company or agency Offering tho insur-
ance if protection is to be available on
truly favorable terms. Crop insurance
must be bought on the same principle as
fire insurance, merely as guaranty
against serious loss and not with the
expectation of securing an indemnity
every two or three years, If the insur-
anCe Is to be written with the idea that
frequent indemnitieS for minor cases of
crop damage are to be paid. it neces-
sariiy becomes SO expensive that those
in greatest need of it can i'll afford to
buy it. The insured should find some
method of helping the organization pro-
viding protection to reduce the heavy ex-
pense connected with the acquisition of
business which now prevails in nearly
all lines Of insurance, at any rate where
the business is conducted on a CONNER
cial basis
In some of the European countries
farmers organizations have applied the
principle If collective purchasing to
their insurance problems. Perhaps the
farmers organizations of the United
states win find some way of solving this
problem on a plan consistent with Amer
lean laws and American conditions, the
writer of the bulletin suggests.