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FIGURE 4.- Relationship between the insurance coverage per acre and the average annual indemnities that

would have been required per acre, 1930-35.3

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Based on a sample of 75 farms with insurance coverage being 75 percent of the 6-year average yield on the insured farm.

In both of the above charts it appears that the average annual cost in bushels per acre of indemnifying losses is larger for those farms with the larger insurance coverage and smaller for those farms with the smaller insurance coverage. This is probably accounted for by the fact that the losses in these regions have often been complete crop failure for all farms, those with high average yields being a complete loss as well as those with low average yields. It would appear that in cases of this kind, where cost per acre is definitely related to coverage, the loss experience for the individual farm should not be combined with the simple average loss experience for the county but with a line of average relationship such as one that could be fitted to the scatter of points shown in the above charts.

FIGURE 5. - Relationship between the insurance coverage per acre and the average annual indemnities

that would have been required per acre, 1930-35.3

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3 Based on a sample of 75 farms with insurance coverage being 75 percent of the 6-year average yield on the insured farm.

It is clearly apparent that in the county in Ohio farms with higher coverage would have required a smaller average annual indemnity per acre. This suggests that farms with higher yields also have relatively less

here too, as in the case of the western Kansas and North Dakota counties, the loss experience of the individual farm should be combined not with the simple average loss experience for the county but with a line of average relationship such as one that could be fitted to the points in the chart.

In the chart for the Oregon county the relationship seems to be somewhat the same as in the Ohio county although not so pronounced,

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TABLE 5.Data for 75 sample farms in Frederick County, Md., showing under the 75-percent plan 1 the insurance coverage for each farm in

bushels of wheat per acre, the annual premium for each farm in bushels per acre, the percentage for each farm that the premium would be
of the coverage, the total amount of premium for all seeded acres on each farm for each year under the annual premium plan and also under
the payment out of surplus plan 3

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Bushels Bushels

7.91 0.34 40.----

8. 23
62..--

7.31 1.06
13...

8. 93
9.---

9. 63 .36

9.89 .56
39.

10. 11 .60
60.--

10.35

.22
7..--

10.39 . 26
12..--

10.95 . 48
61 -

11.02
55...

11.31

11. 45
66.

11. 68
11. 72

11. 87
49.-

11.89
54..

12. 19
10..

12. 39

12. 65 58.

12. 65 . 44

12. 73 1.02
67..--

12. 84 .24
70.--- 12. 89 .34
45..

12.93
13. 28
13.31
13. 54

13.57
50..

13. 65
11..--
13.67

22 See footnotes at end of table.

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TABLE 5.Data for 75 sample farms in Frederick County, Md., showing under the 75-percent plan 1 the insurance coverage for each farm in

bushels of wheat per acre, the annual premium for each farm in bushels per acre,2 the percentage for each farm that the premium would be of the coverage, the total amount of premium for all seeded acres on each farm for each year under the annual premium plan and also under the payment out of surplus plan 3—Continued

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1 Under the 75-percent plan the coverage would be 75 percent of the average yield on the insured farm.
2 The premium as shown here would be an average of the loss experience for the insured farm and the loss experience for all sample farms in the county.

3 Under this plan, if it could be satisfactorily worked out, the farmer would pay a premium only in years when his yield exceeded his average yield. For Frederick County 25
percent of the excess in years of production above the average would be sufficient to cover losses in all years.

- No wheat planted.
•.5 Total indemnities for 6-year period 7,208 bushels.

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