It depends on the type of
policy the farmer has purchased. Farmers may purchase policies that are based on the income generated from the crop or for the production of the farm.
In the case of income-based policies, the insurance policy will base the loss on 5-10 years of income data and based on the price of the crop (i.e., corn, beans, soybeans, etc.) at the beginning of the season.
Production-based policies will look at the farm's production for the previous 5-10 years.