Why it's Essential

Crop insurance helps make America's farmers and ranchers world leaders in agriculture, allowing producers to stay competitive and be more innovative. It also helps them sleep better at night knowing that should the unexpected happen, they will have the financial security to stay in business and go on to plant the next season.

More than ever before, our farmers are being asked to produce more products and achieve higher yields. Agricultural crops for food, feed, fiber and fuel are in great demand both domestically and abroad. New technology, innovation, access to capital and affordable risk management has enabled America's farmers to meet the demands placed upon them. A vibrant Federal crop insurance program is a key component to the tremendous success of our country's agricultural economy.

Crop insurance has been called the linchpin of the Federal safety net for America's farmers and ranchers. In addition to reducing risk and protecting their investments, crop insurance enables farmers to borrow money to expand and improve their businesses by providing lenders the assurance that farmers will have sufficient economic security to repay their loans. Crop insurance also provides the security that enables farmers to forward market their crops to take advantage of market opportunities.

There are many other components of the Federal safety net for America's farmers such as direct payments, disaster assistance and programs designed to support particular crops and special initiatives. But none has the universal significance of the Federal crop insurance program. The vast majority of today's farmers rely on Federal crop insurance because they recognize the value it provides.

Crop insurance has become an essential business tool for America's agricultural producers. Working in an industry where one catastrophic year could wipe out five years of profit, most farmers wouldn't think of operating without some form of crop insurance.