filed claims tending to support underlying notion on the high covariability of risks in agriculture, with
too "few good risks supporting bad risks". The problem of adverse selection seemed to
be highlighted as well particularly in the SF sector where its damage rate was
significantly higher than that of the BF sector and this was even aggravated in its first
decade of operation where actual damage rates exceeded the total premiums paid by the
farmers (including the NG premium subsidy). It was only during the latter years, when
upward premium adjustments were made, that the loss ratios (indemnity paid to
premiums earned) were on the upbeat.[1