Crop insurance a farm business must

My family knows a little about how much farmers are at the mercy of Mother Nature.

During the Dust Bowl, my grandparents Edson and Harriet Durfee fled the disaster in Nebraska and came back east to Chittenango to start again.

Back then, there was no farm safety net. When the Nebraska prairie turned against them, farmers like my grandparents lost it all and had to rebuild on their own.

Today, our family’s Tuscarora Dairy Farm is going strong. I farm with my wife and three sons. We grow corn and wheat and have about 1,000 milk cows.

Our farm is not on the outskirts of town. It’s right in the heart of Chittenango with about a thousand homes nearby.

It’s a great opportunity to continue to connect consumers with agriculture. Most people today don’t have a good understanding of where their food comes from. We run a small vegetable stand to serve the community. It doesn’t make much money, but we do it because it makes our neighbors happy and keeps them connected to farming.

When I think back to the challenges my grandparents faced as they packed up and left Nebraska, it reminds me just how much farming has changed. I think they’d be surprised and pleased at how successful our family farm has become.

We wouldn’t have been as successful without a strong farm safety net. The centerpiece of that safety net is the public-private partnership of crop insurance.

I recently invited representatives from the crop insurance industry to my farm to tell my story and show them how we use crop insurance to manage the weather and price risks that, for my grandparents, were nearly unmanageable.

The large investment required for each acre we plant makes crop insurance a must. Buying insurance helps take out some of the risk on those acres.

When it comes to milk, last year the price was so low that we feared if it continued it would put a lot of stress on our finances.

We bought a dairy revenue protection policy from our local crop growers agent to help mitigate the risk of the volatile dairy market. Fortunately, the price of milk rebounded, and we didn’t need to use the insurance.

Like all farmers, we would rather sell products at a good price than make an insurance claim.

Crop insurance is just like all the other insurance you have. We end up spending a lot of money on insurance, but you can sleep at night knowing if something happens, you are going to be protected partially and you will be able to rebound from it and continue on.

I’d like to thank Congress and the American public for backing a strong system of crop insurance in the Farm Bill. As the political cycle heats up and we head toward the 2020 elections, I hope policymakers will remember just how important crop insurance has become to rural America.

Steve Durfee operates Tuscarora Dairy Farm with his wife and three sons in Chittenango. This op-ed appeared in the Madison County Courier.

Crop Insurance Sets Record, Saves Money, Protects America’s Heartland in 2018

SAN DIEGO – More than 334 million acres of farmland were protected by crop insurance in 2018, a 20 million acre increase over 2017 and an all-time high. And, crop insurance came in $2 billion under original federal budget projections for the year.

Jim Korin, chairman of National Crop Insurance Services (NCIS) and president of NAU Country Insurance Company, noted these accomplishments, among others, in his opening remarks at the crop insurance industry’s annual meeting today.

With more than 1.1 million crop insurance policies sold to farmers across the nation, Korin credited the growing popularity of crop insurance to the exceptional service provided by private-sector insurers and the unique working relationship they share with the government.

“The public-private partnership that defines crop insurance has been successful in providing the important safety net for our farmers and the rural areas where they live,” Korin said. He noted that the crop insurance industry has been able to quickly pay claims while routinely coming in below budget projections, saving taxpayers billions.

Under the successful crop insurance model, farmers invested in their own protection by paying $3.7 billion in premiums and shouldering a significant portion of losses through deductibles.

This public-private partnership was further reinforced with the overwhelming passage of a bipartisan Farm Bill in December that strengthened crop insurance and firmly rebuffed efforts by some critics to make the program less affordable and available to farmers.

“With everything that occurred during the year, nothing defined the world of agriculture more than the debate and passage of the 2018 Farm Bill,” said Korin. “This process saw congressional field hearings from coast to coast and a steady call from farmers across the nation to ‘do no harm’ to the crop insurance safety net.”

Larry Heitman, chairman of the American Association of Crop Insurers and senior vice president of NAU Country Insurance Company, also addressed the convention and said maintaining this kind of support from farmers will continue to be important moving forward.

“As tempting as it may be to relax until the next Farm Bill negotiations begin again, let’s remember our program is a target for those that want to redirect agricultural funds to their own causes or programs,” he told the group. “We must continue to maintain and strengthen our partnership with agriculture commodity associations and conservation and wildlife protection groups to work together for a coalition to benefit all Americans – rural and urban.”

Heitman and Korin explained that the industry’s attention will now turn to working with the U.S. Department of Agriculture to ensure a smooth implementation of the 2018 Farm Bill, while continuing to serve rural America.

Korin concluded, “We must remember our purpose: To provide exceptional coverage and service to farmers and ranchers to help them do what they do best…feed and clothe the world.”

###

Crop Insurance Helps Preserve Family Farming Legacies

Earlier this year, our family ranch was awarded the Colorado Leopold Conservation Award, which recognizes agricultural landowners actively committed to a land ethic.

This was a crowning achievement for Beatty Canyon Ranch, and we are honored to be acknowledged for our efforts to control invasive species, manage grazing and protect wildlife habitats.

Being stewards of the land is something that has always been important to us and we strive to innovate and improve at every turn. We have made great progress in our conservation methods over the years and we know that these practices are not only important for the environment but for the long-term stability of our operations.

Unfortunately, no amount of innovation can always protect us from the perils of Mother Nature. As anyone from southeastern Colorado knows, weather issues like drought are always a challenge for us.

For the last 20 years, persistent drought situations have affected our cow-calf operation. We do our best to overcome these weather-related challenges, but during a severe situation like in 2002-03, when we faced both an extreme drought and a down market, we had to liquidate. That is something that is difficult to come back from.

Thankfully, today we do have some tools in place to help deal these types of weather-related risks. One of the most important tools is an efficient crop insurance program for our nation’s ranchers.

When people talk about crop insurance they don’t always associate it with cattle operations like ours, and that is understandable. In its early days, crop insurance was available for only a handful of commodities. But recent farm bills have made improvements to the program and crop insurance has now been expanded to cover new specialty crops as well as the pasture, range and forage where our cattle graze.

This coverage isn’t a handout—farmers and ranchers pay for the protection out of our own budgets. In Colorado, farmers and ranchers paid $69.7 million collectively for crop insurance policies last year, covering nearly 7 million acres.

The federal government also provides some support, which is essential to keeping the program affordable.

We don’t always need this protection, and we would prefer to never have to use it, but the cost is well worth it because it offers some stability and peace of mind.

On Beatty Canyon Ranch, we currently have fourth, fifth and sixth generations involved in day-to-day operations, and our family ranching history stretches all the way back to when my great grandfather immigrated here from Ireland. While this may sound impressive, it is not uncommon among farm families.

For many ranchers across America, being able to pass down our operations to the next generation is a driving force behind what we do. That, along with playing a role in providing food and fiber for our fellow Americans while being stewards of the land is what makes all of the long days and hard work worth it.

We are doing our part, and I urge Congress to do its part by passing a new Farm Bill with crop insurance intact. It, along with our ongoing conservation efforts, with ensure that ranchers will have a legacy to pass down to future generations.

Steve Wooten operates Beatty Canyon Ranch in Northeast Las Animas County. This op-ed appeared in The Chronicle-News on September 27, 2018.

Crop Insurance Helps Preserve Farming for Future Generations

Farming is a unique profession in so many ways. First, it is more like a calling — to be part of God’s gifts here, and a steward of these gifts. To follow a crop from seed to harvest, or to see an animal born and grow to maturity — that’s a lot of the reason we do what we do.

But farming is different from other professions in other ways as well, including the unique risks and unpredictabilities we face every year. Farmers, for example, are always at the mercy of the weather. A 200-bushel corn crop can quickly become a 50-bushel corn crop under the wrong conditions.

In addition, we face a volatile market and never know which way the pendulum is going to swing. Lately, it hasn’t been swinging in our direction.

Thankfully, we have tools like crop insurance that help us manage risks like these. I feel strongly that crop insurance is critical to preserving our farms for future generations. So strongly, in fact, that in addition to being a farmer, I have also served as a crop insurance agent for fellow farmers for nearly two decades.

In my role as a crop insurance agent, I work with growers to help them purchase protection they need whether they are starting a farm, or preparing for their next crop.

For beginning farmers, having this protection is especially important. Many farmers starting out rely on banks for operating loans and these banks often require crop insurance so that farmers can pay back these loans if they have a bad year.

It has been extremely rewarding for me to work with these young farmers and to play a role in helping them not only get started in business, but stay in business despite the numerous challenges farm country has experienced in recent years.

During the severe drought of 2012, for example, our area had terrible crop yields. That year was hard enough on established farmers, but for beginning farmers I know that having crop insurance played an integral role in their survival.

There are a few misconceptions out there about crop insurance, which have become especially widespread during the ongoing Farm Bill negotiations. But let’s be clear: Crop insurance is not a handout.

Farmers purchase crop insurance out of their own pockets. On average, farmers spend $3.5 to $4 billion per year for crop insurance coverage. Last year in Kentucky, farmers collectively paid $57 million for coverage. As is the case with other types of insurance, we must prove that we have met a deductible to be eligible for a payment for a portion of our loss.

Because of the unique risks involved in farming, the federal government also provides support to reduce the cost to farmers. If we didn’t have this federal support, crop insurance would simply not be affordable for most of America’s farmers and ranchers.

Of note, before crop insurance was widely available and efficient like it is today, the cost of natural disasters fell directly on U.S. taxpayers by way of disaster bills. And they took forever to get to the farm.

I am fortunate to be the eighth generation of my family to farm in LaRue County, although I didn’t inherit family farm land. We purchased our farm more than a decade ago, basically starting from scratch. It hasn’t always been easy, but it is our way of life — our calling. Agriculture has always been the backbone of our country, and I would love for one or all three of my children to carry on this tradition.

In order for that to happen, we have to protect crop insurance.

Jeremy Hinton is a farmer and crop insurance agent in Hodgenville, Kentucky.  This op-ed appeared in the LaRue County Herald News on September 6, 2018.

U.S. Farmers Rely on Crop Insurance

My family has been in agriculture in northwest Ohio for generations. My great-grandfather, grandfather, and dad farmed. I followed in their footsteps.

It was a great blessing. We were taught to love and appreciate hard work, and we learned to work as a family.

I carried this same work ethic into my own business 30 years ago, when I decided to leave the family farm and go into crop insurance full time. Today, my son runs the company and I help him. My wife is still involved, as is my daughter. It is a true family business and is rewarding for all of us.

I know firsthand that families devote vast amounts of financial resources, time and energy to growing the food that feeds the world. I also know firsthand that farming is extremely risky. The 1980s provided periods of challenging weather and prolonged low commodity prices.

Back then, farmers had to go to Congress and ask for ad-hoc relief bills. Taxpayers had to cover the cost and it often took years for farmers to get relief. It wasn’t a fair system so Congress asked the private insurance sector to help solve the problem.

Thankfully, we now have modern crop insurance that eliminates much of the stress that comes from competing with Mother Nature and volatile markets. Revenue coverage allows a farmer to market grain well before harvest and take advantage of profitable sales opportunities that are often not available at or after harvest. Revenue coverage would have been a great blessing for Ohio farmers during the 1980s, when ongoing low commodity prices took a huge toll on grain farms.

In my insurance business, I help farmers purchase policies that are uniquely tailored to their operations. When disaster strikes, a private-sector claims adjuster verifies the loss just like any other insurance product. Farmers pay their premiums, shoulder their deductibles and get checks in weeks, not years.

It is important for policymakers to understand the part about farmers paying for coverage. This is not a handout. Farmers across the country have collectively spent $50 billion out of their own pockets in the past 17 years for coverage. They also absorb the first 25 percent on average of any loss before their coverage kicks in.

Congress is starting its debate on the new Farm Bill, which sets out rules for crop insurance.

I urge Congress to keep in place the system of crop insurance we have today and allow it to expand to meet new demands.

Rex Williamson Payne, farmer, Northwest Ohio

This op-ed ran in the Columbus Dispatch on July 26, 2017.

As Farm Bill Discussions Get Underway, NCIS Unveils Updated Website

OVERLAND PARK, Kan., June 5, 2017 – National Crop Insurance Services (NCIS) is pleased to announce it has updated and redesigned the award-winning Crop Insurance in America website. The revamped website aims to effectively share crop insurance’s success story by offering visitors streamlined access to the latest news and information on crop insurance, as well as encouraging interaction on social media channels.

The site has a crisp, clean design, improved social media sharing tools, and increased security settings.

Features include an updated comprehensive question-and-answer resource, Just the Facts, that lays out the facts about crop insurance and dispels some of the most common arguments against crop insurance put forth by its critics.

The site also features a robust news section that houses recent press releases, the association’s What’s Cropping Up newsletter, relevant headlines, quotes, and other resources, including social media content for easy sharing.

Other items available on the site include updated fact sheets on the importance of crop insurance to individual states; farmer testimonials; a detailed history of the program; a look at the essential strengths of the program, and more.

“The crop insurance program is the cornerstone of the farm safety net and has a great story to tell,” said Tom Zacharias, president of NCIS. “We hope this updated website will provide visitors with a better understanding as to why crop insurance is so valuable, not just to farmers, but to taxpayers as well, and will encourage them to share its success story with others.”

NCIS launched this website in 2008 to better explain the benefits of crop insurance to farmers, taxpayers, and consumers, and to demonstrate how the program helps drive the nation’s rural economy.  In 2015, NCIS was honored to have the website selected by the United States Library of Congress (LOC) to be part of America’s historic collection of Internet materials.

Click here to explore the updated Crop Insurance in America site.

###

Crop Insurers Comment on President’s Proposed Budget

The White House today released details of its FY2018 proposed budget, which included steep cuts to crop insurance and other farm policies.

The American Association of Crop Insurers, Crop Insurance and Reinsurance Bureau, Crop Insurance Professionals Association, Independent Insurance Agents and Brokers of America, National Association of Professional Insurance Agents, and National Crop Insurance Services released the following joint statement in response:

“Weakening crop insurance and making it more difficult for farmers to bounce back during tough times will jeopardize rural jobs and will find little support in rural America or on Capitol Hill. The rural economy is already suffering through a period of low prices and a multitude of spring weather disasters. Yet, the Administration’s budget proposal targets the primary tool farmers use to handle these risks.

“Lawmakers favor crop insurance because it reduces taxpayer risk exposure and has come in under budget since the 2014 Farm Bill was passed. Farmers are willing to help fund their own safety nets – collectively spending $50 billion out of their own pockets on crop insurance since 2000 – because they know private-sector efficiency will speed aid when it is needed most.

“Destructive cuts to crop insurance have been proposed by past Administrations and soundly rejected by Congressional leaders, who recognize the importance of maintaining a strong farm safety net. We fully expect that to be the case again this year, and we are hopeful to engage in meaningful dialogue about how to support America’s hardworking farmers and ranchers in difficult times like these.”

Crop Insurance Preserves South Dakota Farm Economy

South Dakota’s history is deeply rooted in agriculture, perhaps more so than any other state in the union. From the homesteaders who came here in the 19th century, with little more than a plow and a dream, to their descendants who still work the land, agriculture is the way of life for many South Dakotans.

As the president of the S.D. Farm Bureau and a livestock, corn and soybean farmer myself, I can tell you firsthand that our state’s farmers personify a work ethic and a sense of pride and purpose that we are seeing less and less of outside of agriculture these days.

But agriculture is more than just a proud tradition — it’s also S.D.’s top industry, with a $25.6 billion economic impact each year. Our farmers and ranchers generate 20 percent of our state’s economic activity and provide jobs, directly and indirectly, to 122,000 residents.

It’s essential that we preserve S.D.’s farm economy, not just for our own economic well-being, but for all Americans. Our nation’s farmers play an indispensable role in ensuring a safe, affordable and stable food supply. And this role is becoming increasingly important as we struggle to meet the needs of a growing world population. In short, food security is a vital part of our national security and that’s something we need now more than ever.

Unfortunately, our farm economy has seen better days. Our farm families are facing a year of projected below-cost returns on corn, soybeans and wheat. Overall, farm income is also projected to decrease again in 2016. This will be the third consecutive year of declining farm income, following sharp drops in 2014 and 2015 totaling 56 percent in those two years. If the 2016 income projection comes to fruition, it would mark the lowest farm income level since 2002.

This is why having a sufficient farm safety net — with crop insurance as the cornerstone — is more critical than ever. Crop insurance provides protection against the one thing that even the most resilient farmer cannot defeat — the wrath of Mother Nature.

Crop insurance is a unique public-private partnership that not only supports farmers, but eases the burden on taxpayers. Prior to the emergence of crop insurance as the top risk management tool for farmers, natural disasters regularly resulted in very expensive, unbudgeted ad hoc disaster bills from Congress. Now, when disaster strikes, farmers receive an indemnity check.

Let’s be clear, crop insurance is not a handout — far from it. To gain coverage, farmers have to put skin in the game. In fact, since 2000, farmers have spent nearly $30 billion out of their own pockets to purchase crop insurance protection. We only collect an indemnity after we’ve suffered a verifiable loss and met our deductible.

We purchase crop insurance for our family farm every year and have never filed a major claim. But that’s hardly the point. Like our fellow farmers, we purchase crop insurance for the same reasons we purchase home insurance or car insurance — with the hope we’ll never need it. But we’ll keep purchasing it every year because some day we might. Crop insurance gives us peace of mind, and if we ever experience a major crop disaster, would provide us with the resources to keep farming.

Farmers have faced tough times before and rest assured we will get through them again. Old fashioned hard work, innovation and smart farm policies like crop insurance will help ensure that the proud S.D. farming tradition will live on for many future generations, and, in turn, will secure a bright future for us all.

Scott VanderWal is a third-generation family farmer from Volga. He is president of the South Dakota Farm Bureau and vice-president of the American Farm Bureau. This op-ed appeared in the Sioux Falls Argus Leader on August 9, 2016.

Convo 71

USDA’s Risk Management Agency recently announced the improper payment rate — a closely-watched standardized measure of waste and abuse required of all major federal spending programs – fell sharply last year for crop insurance. The rate dropped to a new level of 2.20 percent, representing a 62 percent drop from the prior year’s 5.58 percent.

Ken Ackerman, a former Administer for USDA’s Risk Management Agency and now a Washington D.C. based legal counsel, recently wrote a blog post explaining why that  drop matters.

Convo 71

USDA’s Risk Management Agency recently announced the improper payment rate — a closely-watched standardized measure of waste and abuse required of all major federal spending programs – fell sharply last year for crop insurance. The rate dropped to a new level of 2.20 percent, representing a 62 percent drop from the prior year’s 5.58 percent.

Ken Ackerman, a former Administer for USDA’s Risk Management Agency and now a Washington D.C. based legal counsel, recently wrote a blog post explaining why that  drop matters.

Convo 70

Nearly 90 percent of Americans have a favorable view of farmers, and 92 percent said it was important to provide farmers with federal funding, according to a new national poll released this week. The poll, commissioned by the National Crop Insurance Services, surveyed 1,000 registered voters in early April. Jon McHenry is the Vice President of North Star Opinion Research, the research firm that conducted the poll.

Convo 70

Nearly 90 percent of Americans have a favorable view of farmers, and 92 percent said it was important to provide farmers with federal funding, according to a new national poll released this week. The poll, commissioned by the National Crop Insurance Services, surveyed 1,000 registered voters in early April. Jon McHenry is the Vice President of North Star Opinion Research, the research firm that conducted the poll.

Farming Needs Strong Policy and Crop Insurance

If I don’t take care of the land, then it won’t take care of me, so I consider myself one of the stewards of the earth. I know I’m not alone. My brethren in farming are also caretakers of the land, water and air. We want to be productive and profitable, and pass on our farming operations to the next generation better, more fertile, and more sustainable than we received it.

Given this reality, I naturally become concerned and even a bit cross when I see special interest groups in Washington, D.C., trying to paint farmers in negative light as it relates to taking care of the land and our environment. They attack farm policy and crop insurance, but in critiquing these important tools, with little or no empathy for the risks we take, they are really going after me and farmers like me.

One myth these groups perpetuate is that crop insurance encourages farmers to grow on fragile, uncultivated lands. This is simply not reality, as the number of crop acres in the country has remained stable for more than three decades at roughly 328 million. Meanwhile, the number of those acres that are insured by crop insurance is approximately 298 million.

The 2014 Farm Bill layered additional red tape to ensure conservation compliance on all acres where crop insurance is purchased, and fragile lands are protected by eliminating all crop insurance premium support for farmers if they damage wetlands or plow up native sod.

Another myth they spread is that crop insurance only helps big conventional farming operations when in fact it is a risk management tool that is available to all farmers regardless of operation, size, region or crop. I am a young farmer. I grow both conventional and organic cotton. Crop insurance is arguably more critical for me than it is for the long-established farmers, and I purchase a specialized and exceptionally valuable insurance policy for my organic crop.

It’s a big concern of mine that there is a constant need to defend crop insurance against the myths and outright lies that these special interest groups spread in Washington and beyond. And, frankly, sometimes, I’m amazed that there is so much debate in Congress about the small investment in crop insurance and farm policy, considering the return for every American.

Federal spending on these items is well below one percent of the nation’s entire budget, but the benefit to every American consumer is a safe, secure, diverse and affordable food and fiber supply. Moreover, agriculture is the backbone of a strong economy and a strong society, and from a national security standpoint, it is crucial. We don’t want to be held hostage by another country when it comes to feeding our own people. And right now we are competing with foreign countries that are investing far more in their own agriculture sectors than we are and are cheating on their commitments to free trade in the process.

This constant attacking of farm policy and crop insurance undermines those who work hard to grow the food and fiber we all rely upon.

As farmers, we have no control over weather. We have no control over markets. We have no control over our foreign competitors. We cannot just turn our operations on or off. We have to take care of the land 365 days a year. We need a safety net when commodity prices fall. We need affordable and reliable crop insurance to protect our yearly investments.

Today in my part of the country, I know plenty of farmers who are struggling to make it another year because of the current depressed farm economy while others are making the tough decision to get out of the business altogether. Meanwhile, young people are nervous about jumping into a line of work that is mired in risk and is constantly under attack by special interest groups and some lawmakers in Congress. This is an alarming trend.

Sometimes it takes something drastic to happen for people to realize what they have. I certainly hope it is not the loss of agricultural production in this country as a result of Congress chipping away at the farm safety net for us all to fully appreciate how important it is.

Jeremy Brown is a multi-generational Lubbock farmer who grows both conventional and organic cotton in west Texas. He is on the executive committee of Plains Cotton Growers and also grows wheat, rye and peanuts.

Farm Policy is Essential to Maintaining Ag Production in the U.S.

If there is one place that, in recent years, overwhelmingly demonstrates the need and importance of U.S. farm policy, it is California. For the past four years, this top agricultural producing state has experienced record drought conditions and for farmers like my husband and me, it has taken a toll on our operation.

We have been growing rice in the Sacramento Valley for 30 years and we have never seen a weather event this relentless. Although the arrival of El Nino has provided much needed rain, the effects are marginal because of the intensity of the drought.

Operating loans are essential for every farmer because of the cost of producing crops, but for my family they have enabled us to keep going to the next year despite depressed yields and prices, and in some cases the inability to plant a crop at all.

And we would not be able to receive this crucial financing without crop insurance and farm policy in place. Farming is an inherently risky business and bankers want assurances that we will be able to pay back the loan if disaster strikes. We were not born into farming – we built our operation from the ground up – so we still have land and equipment payments to make regardless of whether we have a good or bad growing season, or whether a natural disaster wipes out our crops altogether. Crop insurance is something we purchase each year to manage this risk and we only receive an indemnity when we suffer a verifiable loss. Even then, it doesn’t make us whole, but it does soften the blow from a bad year.

It’s important to have this kind of safety net in place for all farmers, all across the country. And, I am always alarmed by the calls in Washington to cut what remains of the farm safety net, especially from those who have no idea what it takes to grow food and fiber. We need risk management tools now more than ever to help us overcome unpredictable weather events.

Additionally, we need policy in place to combat unfair practices with our foreign competitors like China and Thailand whose support for their rice growers far exceeds that of the United States and actually violates agreements under the World Trade Organization (WTO). While the U.S. was reforming its policy in the 2014 Farm Bill, other countries were ramping up support for their farmers, in some cases by more than a 100 percent. Their policies are trade distorting and leave American growers at a competitive disadvantage.

American farmers can and do manage extraordinary risks, year in and year out, but we cannot manage the challenges associated with unpredictable and sustained natural disasters, volatile markets, and trade distorting policies of our foreign counterparts without risk management tools like crop insurance and farm policy.

Lawmakers in Washington should consider this reality the next time they want to cut farm policy spending. If they want to continue to have agricultural production in this country, and in California in particular, they need to invest in it.

Lorraine Greco serves on the California Board for the U.S. Rice Producers Association. She grows organic rice with her husband in northern California.

Crop Insurance is Critical for Beginning Farmers

Agriculture has been my passion since an early age growing up on the family farm. I have continued the tradition with a farm of my own.Additionally, I have worked as an agricultural banker for nearly four decades. I started out working in the Farm Credit System, but eventually moved over to the private sector because I wanted to help farmers with estate planning needs in addition to providing credit.

I like to help farmers make the right decisions about their operations, especially as it relates to setting up the next generation of agricultural producers. I want them to be in a good position for the future and prepared for the inevitable challenges that will come their way.

But, I grow more and more concerned about two current trends that I believe threaten the success of agriculture. One is the average age of the American farmer continues to climb while the number of beginning farmers is trending downward. The second trend is the relentless attacks on the farm safety net in Washington that make the uncertainty of farming even more precarious, especially for those young producers just starting.

For example, the 2014 Farm Bill had barely been in place when opponents began proposing cuts – the worst of which appeared in a budget agreement that came together late last year under the cover of darkness and without any consultation with anyone remotely close to farming. The proposal would have essentially gutted crop insurance, which is one of the key elements of the farm safety net.Fortunately, the agricultural community came together and fought off that cut, but this type of attack is a sign of things to come, and it doesn’t bode well for the overall outlook for American agriculture.

A farmer has to invest so much money to grow a crop that they rely on banks for operating loans. Banks would have a hard time making those loans without assurance that farmers would have a way to pay it back if a natural disaster struck.

Crop insurance and farm policy enables everyone – from the farmer to the banker to the taxpayer – to plan for those disasters and overcome them when they happen. If lawmakers continue to try and chip away at this safety net, farmers will not have the ability to survive. This is especially true for young, beginning farmers who have less access to credit and capital.

Therefore, it’s critical that crop insurance remain intact. Investing a future in farming is already a chilling prospect for most young people, given the expense of raising crops, the volatility of the markets and weather events and the low returns on investment. It’s enough to discourage any reasonable person from even trying regardless of whether they are starting from scratch or inheriting the family operation.

As Congress and the White House wrestle with their respective budgets in the coming weeks, I hope good sense will prevail and they’ll leave crop insurance and farm policy alone. Given the current demographics of farming, now is not the time to jeopardize the one thing that farmers can count on.

Larry Kummer is Market President for the Northeast Indiana Horizon Bank.

Crop Insurance is Critical for Beginning Farmers

Agriculture has been my passion since an early age growing up on the family farm. I have continued the tradition with a farm of my own.Additionally, I have worked as an agricultural banker for nearly four decades. I started out working in the Farm Credit System, but eventually moved over to the private sector because I wanted to help farmers with estate planning needs in addition to providing credit.

I like to help farmers make the right decisions about their operations, especially as it relates to setting up the next generation of agricultural producers. I want them to be in a good position for the future and prepared for the inevitable challenges that will come their way.

But, I grow more and more concerned about two current trends that I believe threaten the success of agriculture. One is the average age of the American farmer continues to climb while the number of beginning farmers is trending downward. The second trend is the relentless attacks on the farm safety net in Washington that make the uncertainty of farming even more precarious, especially for those young producers just starting.

For example, the 2014 Farm Bill had barely been in place when opponents began proposing cuts – the worst of which appeared in a budget agreement that came together late last year under the cover of darkness and without any consultation with anyone remotely close to farming. The proposal would have essentially gutted crop insurance, which is one of the key elements of the farm safety net.Fortunately, the agricultural community came together and fought off that cut, but this type of attack is a sign of things to come, and it doesn’t bode well for the overall outlook for American agriculture.

A farmer has to invest so much money to grow a crop that they rely on banks for operating loans. Banks would have a hard time making those loans without assurance that farmers would have a way to pay it back if a natural disaster struck.

Crop insurance and farm policy enables everyone – from the farmer to the banker to the taxpayer – to plan for those disasters and overcome them when they happen. If lawmakers continue to try and chip away at this safety net, farmers will not have the ability to survive. This is especially true for young, beginning farmers who have less access to credit and capital.

Therefore, it’s critical that crop insurance remain intact. Investing a future in farming is already a chilling prospect for most young people, given the expense of raising crops, the volatility of the markets and weather events and the low returns on investment. It’s enough to discourage any reasonable person from even trying regardless of whether they are starting from scratch or inheriting the family operation.

As Congress and the White House wrestle with their respective budgets in the coming weeks, I hope good sense will prevail and they’ll leave crop insurance and farm policy alone. Given the current demographics of farming, now is not the time to jeopardize the one thing that farmers can count on.

Larry Kummer is Market President for the Northeast Indiana Horizon Bank.

Crop Insurance is Money Well Spent by Farmers

Many folks might not realize this, but the passage of the 2014 Farm Bill was a turning point in American history, from an agricultural perspective.  Largely gone are the days of government support programs like direct payments.  In their place, and at the center stage of farm risk management tools, is crop insurance.

I had a chance to learn the value of crop insurance first-hand when my cousin and I rented our first farm together in 2012.  We’ve been farming with our family for many years, but felt it was time to expand out and grab some of our own.  Of course, little did we know that the year we kicked off our farming careers would soon become the driest year in decades. We lost all of our dryland crops, roughly forty percent of our acres that year. Thankfully, we had purchased crop insurance.

Unlike days of old, crop insurance is not a federal handout.  In fact, if farmers want to enjoy the protection provided by crop insurance, they must purchase it.  And they do so willingly, spending roughly $4 billion per year out of their own back pockets on crop insurance premiums alone.

For most beginning farmers, crop insurance is nearly a necessity, since banks are hesitant to make loans to farmers who lack sufficient collateral.  Crop insurance allows banks the opportunity to increase lending capabilities with the security of crop insurance.  That’s because with a crop insurance policy in hand, banks feel more secure making those loans to  farmers, since there’s a guarantee of revenue even if the crop fails.

Crop insurance is a public-private partnership whereby individual farmers like me can buy policies for insurance that is specifically tailored for our tolerance to risk and the profile of our farm.  Crop insurance is affordable to farmers, thankfully, because the federal government provides a discount, ensuring that all farmers, young and old, big and small, can purchase policies if they choose to.

Farmers buy crop insurance for the same reason drivers purchase auto insurance:  it offers some degree of stability in times of disaster.  Crop insurance has become, in essence, the nation’s insurance policy for the food supply.  When Mother Nature strikes and farmers lose their crops, those with crop insurance policies in hand can bounce back and plant again the next year.

Crop insurance has also removed some of the financial risk from taxpayers.  Prior to the rise of modern day crop insurance, the wide-scale disaster that we experienced with the great drought of 2012 would have necessitated a very expensive, ad hoc disaster bill from Congress.  Those bills are big and are fully funded by taxpayers.

And while anything is better than nothing when you literally lose the farm, those disaster funds usually took a year or more to arrive in the hands of farmers who needed them.  In my case when I lost forty percent of my crop in 2012, a year would have been much too late.

Crop insurance, on the other hand, is administered by private insurance companies and the indemnity arrives in weeks or a month or two, not years later.  The crop insurance policy I purchased not only allowed me and my cousin to pay back our production loan, but also meet our forward contracting obligations.  And we were able to bounce back and plant the next year.  That’s a smart public policy because it ensures food security for our nation.

Of course crop insurance has its critics, and their sights are squarely on crop insurance, since it’s really the only game in town. And that’s why it’s important for farmers to speak up and let their elected officials know how much they value this risk management tool.

Needless to say, if we hadn’t purchased crop insurance our first year of farming, my cousin and I would be spending years paying off that production loan.  And without this valuable risk management tool available, I’d venture to say many more of America’s farmers would have been joining us.

Scott Reilly farmer and crop insurance agent and lives in Spalding Nebraska.

 

Crop Insurance is Money Well Spent by Farmers

Many folks might not realize this, but the passage of the 2014 Farm Bill was a turning point in American history, from an agricultural perspective.  Largely gone are the days of government support programs like direct payments.  In their place, and at the center stage of farm risk management tools, is crop insurance.

I had a chance to learn the value of crop insurance first-hand when my cousin and I rented our first farm together in 2012.  We’ve been farming with our family for many years, but felt it was time to expand out and grab some of our own.  Of course, little did we know that the year we kicked off our farming careers would soon become the driest year in decades. We lost all of our dryland crops, roughly forty percent of our acres that year. Thankfully, we had purchased crop insurance.

Unlike days of old, crop insurance is not a federal handout.  In fact, if farmers want to enjoy the protection provided by crop insurance, they must purchase it.  And they do so willingly, spending roughly $4 billion per year out of their own back pockets on crop insurance premiums alone.

For most beginning farmers, crop insurance is nearly a necessity, since banks are hesitant to make loans to farmers who lack sufficient collateral.  Crop insurance allows banks the opportunity to increase lending capabilities with the security of crop insurance.  That’s because with a crop insurance policy in hand, banks feel more secure making those loans to  farmers, since there’s a guarantee of revenue even if the crop fails.

Crop insurance is a public-private partnership whereby individual farmers like me can buy policies for insurance that is specifically tailored for our tolerance to risk and the profile of our farm.  Crop insurance is affordable to farmers, thankfully, because the federal government provides a discount, ensuring that all farmers, young and old, big and small, can purchase policies if they choose to.

Farmers buy crop insurance for the same reason drivers purchase auto insurance:  it offers some degree of stability in times of disaster.  Crop insurance has become, in essence, the nation’s insurance policy for the food supply.  When Mother Nature strikes and farmers lose their crops, those with crop insurance policies in hand can bounce back and plant again the next year.

Crop insurance has also removed some of the financial risk from taxpayers.  Prior to the rise of modern day crop insurance, the wide-scale disaster that we experienced with the great drought of 2012 would have necessitated a very expensive, ad hoc disaster bill from Congress.  Those bills are big and are fully funded by taxpayers.

And while anything is better than nothing when you literally lose the farm, those disaster funds usually took a year or more to arrive in the hands of farmers who needed them.  In my case when I lost forty percent of my crop in 2012, a year would have been much too late.

Crop insurance, on the other hand, is administered by private insurance companies and the indemnity arrives in weeks or a month or two, not years later.  The crop insurance policy I purchased not only allowed me and my cousin to pay back our production loan, but also meet our forward contracting obligations.  And we were able to bounce back and plant the next year.  That’s a smart public policy because it ensures food security for our nation.

Of course crop insurance has its critics, and their sights are squarely on crop insurance, since it’s really the only game in town. And that’s why it’s important for farmers to speak up and let their elected officials know how much they value this risk management tool.

Needless to say, if we hadn’t purchased crop insurance our first year of farming, my cousin and I would be spending years paying off that production loan.  And without this valuable risk management tool available, I’d venture to say many more of America’s farmers would have been joining us.

Scott Reilly farmer and crop insurance agent and lives in Spalding Nebraska.

 

Crop Insurance Can Help Keep Multi-Generational Farms Within the Family

My farm has been in my family since the mid-1800s. I have seen firsthand how farming has changed over the decades. It is certainly more expensive to farm than when my parents and grandparents and great-great grandparents farmed the land, but one thing hasn’t changed in more than 150 years: farming is an unpredictable business.

Farmers can’t predict the future, but we can make a genuine effort to be smart, informed business owners. We try to make the right decisions and work with what we have. The problem is when ‘what we have to work with’ is ripped out from underneath us. Without crop insurance, many farmers wouldn’t be able to keep farming. Cutting crop insurance would be pulling the rug from underneath agriculture.

Before the modern day crop insurance system, farmers relied on ad hoc disaster relief payments. This was a costly and unpredictable option for all of us – the government, the taxpayer and the farmer, who in some cases may have received a payment too late to avoid bankruptcy.

Congress agreed that crop insurance was the best risk management tool for farmers. In the 2014 Farm Bill, they implemented a crop insurance system that ensured farmers would have access to affordable crop insurance while removing the risk from the taxpayer. In stride, farmers have made operating decisions with the assumption that all the policies of this bill would be in place until the Farm Bill expires in 2018.

Now, in 2015, this proven risk management tool, crop insurance, is in front of the firing squad. I’m not certain why some Members of Congress are willing to turn their backs on farmers now. Washington is nearly 900 miles away from my family farm. From that distance, it may be easy to assume that cuts to farm programs, like crop insurance, would have no effect on farmers, but that’s not an accurate picture.

Crop insurance is the only safety net that most farmers have anymore. Nearly all the cropland in the United States is protected by crop insurance. In Wisconsin, a majority of crop acres are insured, including grain commodities and specialty crops.

Insurance not only allows farmers to face natural disasters and damaging production years without losing everything, but it provides assurance that we can make payments to our banks. The same way any person in this country cannot get a house loan or a car loan without proof of insurance, agricultural banks want the guarantee that farmers can make their payments.

The agriculture economy is struggling. Farm income continues to decline, crop prices are down and inputs continue to rise. The 2015-16 farm year may be a make or break year for many farmers who are ending the year in the red. Forty years ago, a farmer could lose a crop one year and still farm the next. Nowadays one crop loss could end someone’s farming career. In the current state of agriculture, we can’t afford to have another leg chopped off our stool that’s already leaning.

My wife and I have risked our livelihood to maintain the farm for our children and grandchildren, just as my parents and grandparents did for us. Without crop insurance, we would have to quit farming. For the events we can’t predict, crop insurance ensures we won’t lose our multi-generational family farm.

Darrell Crapp is a farmer from Lancaster, Wisconsin. He farms in partnership with his two sons.  This op-ed appeared in the Prairie du Chien Courier Press on January 20, 2016.

Crop Insurance Can Help Keep Multi-Generational Farms Within the Family

My farm has been in my family since the mid-1800s. I have seen firsthand how farming has changed over the decades. It is certainly more expensive to farm than when my parents and grandparents and great-great grandparents farmed the land, but one thing hasn’t changed in more than 150 years: farming is an unpredictable business.

Farmers can’t predict the future, but we can make a genuine effort to be smart, informed business owners. We try to make the right decisions and work with what we have. The problem is when ‘what we have to work with’ is ripped out from underneath us. Without crop insurance, many farmers wouldn’t be able to keep farming. Cutting crop insurance would be pulling the rug from underneath agriculture.

Before the modern day crop insurance system, farmers relied on ad hoc disaster relief payments. This was a costly and unpredictable option for all of us – the government, the taxpayer and the farmer, who in some cases may have received a payment too late to avoid bankruptcy.

Congress agreed that crop insurance was the best risk management tool for farmers. In the 2014 Farm Bill, they implemented a crop insurance system that ensured farmers would have access to affordable crop insurance while removing the risk from the taxpayer. In stride, farmers have made operating decisions with the assumption that all the policies of this bill would be in place until the Farm Bill expires in 2018.

Now, in 2015, this proven risk management tool, crop insurance, is in front of the firing squad. I’m not certain why some Members of Congress are willing to turn their backs on farmers now. Washington is nearly 900 miles away from my family farm. From that distance, it may be easy to assume that cuts to farm programs, like crop insurance, would have no effect on farmers, but that’s not an accurate picture.

Crop insurance is the only safety net that most farmers have anymore. Nearly all the cropland in the United States is protected by crop insurance. In Wisconsin, a majority of crop acres are insured, including grain commodities and specialty crops.

Insurance not only allows farmers to face natural disasters and damaging production years without losing everything, but it provides assurance that we can make payments to our banks. The same way any person in this country cannot get a house loan or a car loan without proof of insurance, agricultural banks want the guarantee that farmers can make their payments.

The agriculture economy is struggling. Farm income continues to decline, crop prices are down and inputs continue to rise. The 2015-16 farm year may be a make or break year for many farmers who are ending the year in the red. Forty years ago, a farmer could lose a crop one year and still farm the next. Nowadays one crop loss could end someone’s farming career. In the current state of agriculture, we can’t afford to have another leg chopped off our stool that’s already leaning.

My wife and I have risked our livelihood to maintain the farm for our children and grandchildren, just as my parents and grandparents did for us. Without crop insurance, we would have to quit farming. For the events we can’t predict, crop insurance ensures we won’t lose our multi-generational family farm.

Darrell Crapp is a farmer from Lancaster, Wisconsin. He farms in partnership with his two sons.  This op-ed appeared in the Prairie du Chien Courier Press on January 20, 2016.

Keep Crop Insurance Out of the Crosshairs

The passage of the 2014 Farm Bill was the beginning of a new chapter in U.S. farm policy, putting to rest most of the old farm support programs and replacing them with a reformed farm safety net and its centerpiece: Crop insurance.

Unlike farm programs of the past, only farmers who purchase crop insurance enjoy its protection. In fact, when a farmer purchases crop insurance, they are handed a bill, not a check. Crop insurance is not cheap by any stretch of the imagination, with farmers paying tens of thousands of dollars per year on premiums for policies that most of them will hopefully not need.

The Farm Bill was a grand compromise. In exchange for $23 billion in spending cuts programs, Congress required market-oriented reforms to commodity programs and made a five-year commitment to ensure the affordability, availability and viability of crop insurance. Unfortunately, anti-farmer groups are targeting crop insurance with proposed cuts that would seriously hamstring the private sector delivery that is the hallmark of success for the program. That would not only threaten to make the system unworkable for farmers, but also endanger the reliability of our nation’s food supply.

Farmers and farm groups value crop insurance because it combines the efficiency of the private sector with the universal coverage of the public sector. Today, virtually any farmer who wants to purchase crop insurance can, and here in Wisconsin, farmers spent roughly $86 million out of their own pockets to do so this year alone. Nationally, that number usually exceeds $4 billion annually.

Remember the historic drought of 2012 that threatened the nation’s heartland and was compared to the dreadful days of the great Dust Bowl? In the past, a disaster of that magnitude would have triggered an overly expensive and completely taxpayer-funded disaster bill. And although those funds were appreciated, they could take months or years to arrive, oftentimes too late to stop a foreclosure.

Things have changed dramatically now that farmers have much improved access to crop insurance, which now protects more than 90 percent of planted cropland. When the drought laid siege to the nation’s heartland, private sector crop insurance adjusters were quickly on the scene, and indemnity checks were usually in the hands of farmers who had verifiable losses in weeks, not months.

Crop insurance worked so well in 2012 that the nation’s farmers bounced back the next year and produced an enormous bounty of grains. And there wasn’t a single call for a disaster bill.

Farmers are the engines that drive the economy of rural America, and without a sufficient safety net in place – like crop insurance – that entire equation is at risk. That is why not only farmers, but ranchers, input suppliers, processors, and equipment companies have all called on Congress to protect crop insurance from any further cuts.

As a farmer, I can tell you that I take great pride in what I do and I understand the important role I play in producing the nation’s food, fiber, feed, and fuel supply. It seems that farmers and consumers alike here in Wisconsin need to remind our congressional delegation of this fact as well.

Tom Gillis, President, Wisconsin Corn Growers Association

Keep Crop Insurance Out of the Crosshairs

The passage of the 2014 Farm Bill was the beginning of a new chapter in U.S. farm policy, putting to rest most of the old farm support programs and replacing them with a reformed farm safety net and its centerpiece: Crop insurance.

Unlike farm programs of the past, only farmers who purchase crop insurance enjoy its protection. In fact, when a farmer purchases crop insurance, they are handed a bill, not a check. Crop insurance is not cheap by any stretch of the imagination, with farmers paying tens of thousands of dollars per year on premiums for policies that most of them will hopefully not need.

The Farm Bill was a grand compromise. In exchange for $23 billion in spending cuts programs, Congress required market-oriented reforms to commodity programs and made a five-year commitment to ensure the affordability, availability and viability of crop insurance. Unfortunately, anti-farmer groups are targeting crop insurance with proposed cuts that would seriously hamstring the private sector delivery that is the hallmark of success for the program. That would not only threaten to make the system unworkable for farmers, but also endanger the reliability of our nation’s food supply.

Farmers and farm groups value crop insurance because it combines the efficiency of the private sector with the universal coverage of the public sector. Today, virtually any farmer who wants to purchase crop insurance can, and here in Wisconsin, farmers spent roughly $86 million out of their own pockets to do so this year alone. Nationally, that number usually exceeds $4 billion annually.

Remember the historic drought of 2012 that threatened the nation’s heartland and was compared to the dreadful days of the great Dust Bowl? In the past, a disaster of that magnitude would have triggered an overly expensive and completely taxpayer-funded disaster bill. And although those funds were appreciated, they could take months or years to arrive, oftentimes too late to stop a foreclosure.

Things have changed dramatically now that farmers have much improved access to crop insurance, which now protects more than 90 percent of planted cropland. When the drought laid siege to the nation’s heartland, private sector crop insurance adjusters were quickly on the scene, and indemnity checks were usually in the hands of farmers who had verifiable losses in weeks, not months.

Crop insurance worked so well in 2012 that the nation’s farmers bounced back the next year and produced an enormous bounty of grains. And there wasn’t a single call for a disaster bill.

Farmers are the engines that drive the economy of rural America, and without a sufficient safety net in place – like crop insurance – that entire equation is at risk. That is why not only farmers, but ranchers, input suppliers, processors, and equipment companies have all called on Congress to protect crop insurance from any further cuts.

As a farmer, I can tell you that I take great pride in what I do and I understand the important role I play in producing the nation’s food, fiber, feed, and fuel supply. It seems that farmers and consumers alike here in Wisconsin need to remind our congressional delegation of this fact as well.

Tom Gillis, President, Wisconsin Corn Growers Association

Insurance on crops boosts farms of all sizes

It is no secret that farm demographics demonstrate an alarming trend in American agriculture.

The average age of the American farmer is rising while the number of beginning farmers is decreasing.

These beginning farmers are typically younger than their more established counterparts with less access to credit and capital.

I see this reality every day as a banker at one of the largest agricultural lending institutions in Indiana. In general, all farmers need access to credit to operate and manage a farm, but it is even more crucial for a young farmer because of the enormous startup costs.

It is not an exaggeration to say that farmers borrow more in a single year to grow a crop than some Americans borrow in a lifetime.

And, frankly, banks can be wary of lending to a young farmer just starting out because of the combination of a short credit history and the inherent riskiness of the business.

The one factor in their favor is crop insurance. By purchasing a policy, young farmers enhance their ability to obtain financing because banks have the assurance they can make payments even during tough times.

But opponents of farm policy in Washington are proposing legislation that, if enacted, would threaten the viability of this important risk management tool and make it harder for young, beginning farmers to survive.

These farm policy critics would have you believe that barring producers with large operations from participating in crop insurance helps smaller farmers.

Actually, it does the opposite.

Pooling of risk is essential for any viable insurance program. Because every farmer of every size in every part of the country can purchase crop insurance, the risk pool is large and diverse, which makes crop insurance affordable for all farmers and minimizes the financial exposure of the bank, the farmer and the taxpayer.

Similarly, car insurers want older, more experienced drivers in the same risk pool as those who are younger and potentially more accident-prone.

Eliminating the more established farmers from the mix shrinks this pool and undermines the entire system, making it harder for smaller, beginning farmers to get insurance coverage and, subsequently, agricultural financing.

Statistics already show us that farming is a hard life with fewer and fewer people willing to try it.

Now is not the time to make starting a farm even more difficult by destroying the viability and affordability of crop insurance.

Now is the time to protect the one thing beginning farmers and their bankers can count on.

Joe Kessie is the senior vice president and commercial south regional manager at Lake City Bank in Warsaw, Indiana.

Insurance on crops boosts farms of all sizes

It is no secret that farm demographics demonstrate an alarming trend in American agriculture.

The average age of the American farmer is rising while the number of beginning farmers is decreasing.

These beginning farmers are typically younger than their more established counterparts with less access to credit and capital.

I see this reality every day as a banker at one of the largest agricultural lending institutions in Indiana. In general, all farmers need access to credit to operate and manage a farm, but it is even more crucial for a young farmer because of the enormous startup costs.

It is not an exaggeration to say that farmers borrow more in a single year to grow a crop than some Americans borrow in a lifetime.

And, frankly, banks can be wary of lending to a young farmer just starting out because of the combination of a short credit history and the inherent riskiness of the business.

The one factor in their favor is crop insurance. By purchasing a policy, young farmers enhance their ability to obtain financing because banks have the assurance they can make payments even during tough times.

But opponents of farm policy in Washington are proposing legislation that, if enacted, would threaten the viability of this important risk management tool and make it harder for young, beginning farmers to survive.

These farm policy critics would have you believe that barring producers with large operations from participating in crop insurance helps smaller farmers.

Actually, it does the opposite.

Pooling of risk is essential for any viable insurance program. Because every farmer of every size in every part of the country can purchase crop insurance, the risk pool is large and diverse, which makes crop insurance affordable for all farmers and minimizes the financial exposure of the bank, the farmer and the taxpayer.

Similarly, car insurers want older, more experienced drivers in the same risk pool as those who are younger and potentially more accident-prone.

Eliminating the more established farmers from the mix shrinks this pool and undermines the entire system, making it harder for smaller, beginning farmers to get insurance coverage and, subsequently, agricultural financing.

Statistics already show us that farming is a hard life with fewer and fewer people willing to try it.

Now is not the time to make starting a farm even more difficult by destroying the viability and affordability of crop insurance.

Now is the time to protect the one thing beginning farmers and their bankers can count on.

Joe Kessie is the senior vice president and commercial south regional manager at Lake City Bank in Warsaw, Indiana.

This drought just isn’t giving up, but farmers aren’t quitters

California’s central valley has been called America’s salad bowl, but honestly in the last four years, it looks more like a dust bowl than a vegetable garden. The historic drought has caused many California farmers to pay prices for water – just to keep their orchards alive – that most Americans would find unfathomable.

Almond, stone fruit, grape and citrus owners once paid roughly $70 per acre foot to ensure that their long term investments had enough water to remain healthy and productive. That cost is now as much as $1,300 per acre foot – about an 1800 percent increase – all while the retail value of their crops has risen very little in comparison.

Estimates are that 170,000 jobs in Kern County alone are directly connected to farming and harvesting. But the number of jobs connected to supporting those farmers, growers and harvesters is around eight times that amount. Crop insurance acts as an underpinning for all of these important jobs and productivity that represent a sizable portion of our economy.

In the past, a wide scale disaster of this magnitude would have triggered a series of very expensive ad hoc disaster bills paid for exclusively by taxpayers. But there has not been a single disaster bill passed even though this drought refuses to release its grip. And that’s because nowadays, farmers are able to purchase the protection and peace of mind of crop insurance.

Crop insurance is a public private partnership whereby farmers purchase policies with their own money, and the policies are sold and serviced by participating companies and agents.

Clearly, the success behind crop insurance is that it’s affordable, viable, and available. Unlike other forms of insurance, any farmer who wishes to purchase crop insurance can do so, regardless of the size of their farming operation or how many years they may have under their belts farming.

Farmers prefer crop insurance because it allows them to pay a premium to help remove some degree of risk from a very volatile business. Twenty years ago, many farmers had never heard of crop insurance. Today, crop insurance protects more than 90 percent of planted acres nationally.

A crop insurance check will never come close to what a farmer can get from a good harvest. But it does offer farmers some peace of mind so that they know that if Mother Nature gets ugly, they can bounce back and be in business again next year. That’s good for consumers, who don’t want their food supply disrupted, and good for the rural economy as well.

When I began this career 13 years ago, I was surprised that bankers were making loans without the guarantee of crop insurance. Obviously, that doesn’t happen much anymore. In fact, it’s very difficult for farmers to get a loan at all without a crop insurance policy in hand.

Of course, crop insurance has its critics who try and make the program sound like another federal handout. Nothing could be further from the truth. In fact, when farmers purchase crop insurance, they receive a bill, not a check. And only receive a payment if they incur a loss greater than a deductible amount chosen a year in advance. Just like homeowners insurance, farmers buy crop insurance hoping they won’t have to use it, but rest better at night knowing they are more secure.

Yes, this drought has been historic and is about as stubborn as a drought can be. But farmers are hardworking, honest and smart businessmen and women who have armed themselves with the best tools possible to weather this storm. And crop insurance has ensured that California’s central valley will remain America’s fruit and vegetable garden for generations to come.

Todd Snider is a crop insurance agent, Kern County Farm Bureau director, Bakersfield Homeless Center director, and resides in Bakersfield.

Crop Insurance Literally Saved My Mississippi Farm

As a fourth generation Mississippi farmer, I grew up knowing that I worked in a field full of risks.  When the weather cooperates, prices dive.  When prices are great, foreign markets collapse, sending prices into a sudden nosedive.   It’s always something.

However, it wasn’t until I actually set out on my own in farming in 2011 that I fully understood just how financially exposed farmers are when they put a crop in the ground.  That year, I had to borrow roughly $2.5 million to put 3,500 acres of mostly corn into the ground, fully knowing the financial consequences if things went awry.

Just as luck would have it, my crop insurance agent talked me into buying enough coverage that year to cover a loss – up to 85 percent of my crop – that was simply unimaginable to me.  I wrote that $60,000 check knowing purchasing my crop insurance policy that year certain that I was buying coverage for a catastrophe that would never happen.  And then it happened.  And that’s the moment I realized that for me, crop insurance is not only essential, it’s the only reason I’m still in business today.

The concern that I had about what had become the drought of 2011 after I planted my crop quickly morphed into a lump in my throat as torrential rains came to the Mississippi delta and the local river spilled over its banks.  Before I knew it, the levees had failed and the Yazoo River was knocking on my front door, flooding nearly my entire farm.

Crop insurance is a public-private partnership whereby individual farmers purchase policies out of their own back pockets for insurance that is specifically tailored for their tolerance to risk and the profile of their farm.  Crop insurance is affordable to farmers, thankfully, because the federal government provides a discount, ensuring that all farmers, young and old, big and small, can purchase policies if they choose to.

Farmers buy crop insurance for the same reason drivers purchase auto insurance:  because it gives you some degree of stability in times of disaster.  If you wreck your car, your car insurance will replace it and you can go to work the next day.  Why wouldn’t we as a nation also want to have an insurance policy on our food supply, since that, after all, is the most important thing we have?

Prior to the rise of modern day crop insurance, the wide-scale disaster that we experienced in 2011 would have necessitated a very expensive, ad hoc disaster bill from Congress.  While anything is better than nothing when you literally lose the farm, those disaster funds usually took a year or more to actually land in the hands of the farmers who needed the help.  A year or two is often just too late for some farmers, particularly young and beginning farmers.

Crop insurance, on the other hand, is administered by private insurance companies and help arrives in weeks or a month or two, not years later.  In my case, as my farm was literally underwater, my crop insurance agent, the adjuster and the their supervisor were on site to get things moving for me.

In 2014, crop insurance covered nearly 90 percent of planted farmland in the U.S., costing farmers roughly $3.8 billion out of their own back pockets.  Those policies protected 128 different crops including nearly all major commodities and a long list of specialty crops including apricots, bananas, blueberries, cherries, coffee, olives and tangerines.

Needless to say, if I hadn’t purchased crop insurance that first year I struck out on my own, I would be doing something else other than what I love and do best, which is farming.  And me, my wife and kids would be spending the rest of our lives paying the bank back for that first production loan I borrowed.  Don’t let anyone tell you anything differently:  Affordable, available and viable crop insurance is essential for a healthy farm sector and plentiful, domestic food supply.

John Michael Pillow is a farmer from Yazoo City, Mississippi.

Cuts to the Farm Safety Net Jeopardize a National Asset

“When the well’s dry, we shall know the worth of water,” said Benjamin Franklin.

Similarly, if ever we lose the hard-working independent family farms that take care of the nation’s landscape while producing a diverse set of crops more reliably and efficiently than any farm sector in history, then, and only then will we truly understand the value they provide.

I, for one, hope we as a nation never get to that point and I will work every day on behalf of agricultural producers to prevent such a scenario. But, it’s a challenge for a number of reasons; chief among them is we take our secure, affordable, national food supply for granted. It’s always been there, it always will be.

To be sure, the “well” that is the American farmer is not going dry, but here are some reasons why we should make certain that the policies we embrace don’t put our farmers in danger.

First, the demographics are not on our side. The number of farmers continues to decline and the age of farmers continues to increase. These numbers speak to a way of life that is hard and seems to grow harder by the day.

Second, the business of farming is getting ugly. The Secretary of Agriculture is forecasting a 32 percent decline in net farm income from 2014 to 2015 and lower commodity prices for the foreseeable future.

Third, when farmers aren’t dealing with the vagaries of Mother Nature and falling commodity prices, then they’re worried about the constant threat of new regulatory burdens.  Just consider recent activity in Washington: the Environmental Protection Agency finalized a rule that some have labeled the biggest land grab in the history of the U.S. causing every ditch across rural America to be regulated as a major waterway. Farmers and ranchers will endure the brunt of this new regulation as the primary stewards of land resources in the U.S.

Finally, to add to this political risk and uncertainty, some lawmakers are trying to use the appropriations process to threaten farm policy one year into the 2014 Farm Bill. This is after the farm safety net has already borne dramatic cuts over the last decade in an effort to reduce our national deficit.

Crop Insurance was the primary target.  And, while the efforts were rightly rejected, they could have brought an agricultural sector that is already suffering to its knees.  Farmers purchase crop insurance to protect against losses due to natural disasters.  They only receive an indemnity after suffering a verifiable loss and paying their deductible. Crop insurance enables farmers to rebound quickly after a disaster and it prevents dramatic farm losses, which in turn allows them to pay credit obligations and fixed expenses.

This system is hugely important for not only farmers, but also to rural communities and the national economy as a whole. Agriculture accounts for nearly $800 billion in economic activity and supports one out of every 11 jobs in the economy. Cutting the farm safety net would serve to reduce farm financial protection and drive independent American farm families out of business.

Meanwhile, our foreign competitors seem more than ready to move the U.S. out of the agriculture business as they ramp up support for their own farmers. As Texas Tech University’s Darren Hudson recently told a Congressional committee, “Other countries are treating their agricultural sectors as a national asset for security purposes and for the U.S. not to consider the implications of those choices would leave us at a competitive disadvantage.”

Indeed, it would be a tragic commentary if years from now – having squandered our own national asset because we didn’t fully appreciate its worth – we look back and remember what we had and lost.

Tim Lust is the CEO of the National Sorghum Producers.

 

Crop insurance essential for farmers

Crop insurance essential for farmers

New England Farmers Need Access to Affordable Crop Insurance

Although Federal Crop Insurance has been around since 1938, it was largely unused by the farmers because it was either unaffordable, unavailable, or both.  Instead, when farmers experienced widespread losses from natural disasters like floods, hail, or hurricanes they turned to Congress for ad hoc disaster assistance.

According to the Congressional Research Service, that assistance has cost taxpayers in excess of $70 billion since 1989.  With taxpayers opposed to the cost of the program and farmers unable to pay expenses due to the time it took to deliver relief, Congress acted.  That action came in the form of the Federal Crop Insurance Act, which expanded crop insurance, making it affordable and accessible to our nation’s farmers.

With the passage of the 2014 Farm Bill, Congress ended direct payments and other similar programs.  Today, if farmers wish to manage the risk posed by Mother Nature and market swings, they must purchase crop insurance.

Crop insurance is a public-private partnership that provides farmers with risk management tools that can be tailored to their needs.  The cost is shared by farmers, who pay premiums and have deductibles, as well as participating crop insurance companies and the federal government who shoulder a portion of losses.

And crop insurance has had plenty of opportunity to prove its worth to New England farmers.  In 2011, the arrival of Tropical Storm Irene turned the regions’ creeks into torrents and flooded many of the area’s croplands right before harvest.  Farmers who needed the field crops that had yet to be harvested watched in despair, as those fields were first swallowed and then erased by Mother Nature.

Thankfully, many of those farmers had purchased crop insurance, and private sector companies who assessed the damage had indemnity checks to the farmers usually within weeks or months, not the years that federal disaster assistance can take.  This allowed New England farmers to bounce back and be in full production again in 2012, ensuring rural economies didn’t suffer any long-term damages.

Last year, farmers spent $3.8 billion out of their own pockets purchasing crop insurance nationally.  Those policies protected 295 million acres of farmland valued at $129 billion.   Today, 90 percent of planted cropland was protected by federal crop insurance, which today protects 128 different varieties of crops, ranging from commodities like corn to fresh vegetables.

New England is unique, both in the types of farming we do and the markets we serve.  Many of our smaller and diversified farmers sell directly to consumers and the variety of crops raised limit their option for crop insurance.  The 2014 Farm Bill created the Whole Farm Revenue Protection Program to address the needs of diversified farmers and offer roughly equivalent crop insurance products to them.  Whole farm protection policies are especially important to New England farmers who are now dealing with the increased weather fluctuations caused by climate change, which has triggered a 73 percent increase in extreme weather events in New England.

Agriculture has always played an important role in the New England economy.  It is not only part of our heritage, but it is topic of growing importance to consumers who wish to know more about their food.  New England farmers, whether they are dairymen, fruit and vegetable growers, or any other combination we see in our rural landscape, need a safety net to guard against events beyond their control. By ensuring crop insurance remains affordable, available and viable we will ensure the continuation of our farms for the benefit of consumers and rural towns across the region.

Roger Noonan is president of New England Farmers Union.

Farmers Need Protection of Crop Insurance

When the homesteaders came to Kansas, they were looking for land to farm and a chance at the American dream. If they were like my family, they arrived here in a covered wagon, and many of us still live on the land where they began to build their dreams.

But Kansas can be a cruel place to farm. On the turn of a dime, a lifetime’s worth of work and every penny you have can be wiped out by a single hailstorm, a heat wave or drought, a springtime flood or frost, or a market crash that erases any chance of profit regardless of how well your crops do that year.

And that, in a nutshell, is why the vast majority of Kansas farmers purchase crop insurance every year, and why it must remain available, affordable and viable. In fact, with the passage of the 2014 farm bill, crop insurance is the primary risk management tool available to commodity farmers and the only risk management tool available to many specialty crop farmers.

One thing that has dramatically changed in agriculture since my family homesteaded in Minneapolis, Kan., is that farming has now become an incredibly capital-intensive venture. It takes so much money just to put a crop in the ground and harvest it at the end of the season that anyone farming without crop insurance might as well be playing Russian roulette.

I’ve had lots of friends tell me over the past several years that if it weren’t for crop insurance, they would not have been able to put a crop in the ground the next year. Crop insurance is a public-private partnership whereby farmers purchase private policies from participating companies that sell and service the policies. One of the government’s main roles is to discount the policies to a degree that they are widely affordable to most farmers.

In 2014, about 90 percent of planted cropland was protected by crop insurance, paid for out of the back pockets of farmers to the tune of $3.8 billion. Nationally, more than 1.2 million policies were purchased, protecting almost 294 million acres of food, feed, fiber and fuel crops that accounted for more than $110 billion in liabilities.

With the cost of farming so high, most farmers have to actually show proof of having purchased crop insurance in order to secure a production loan from a bank. The farmers get to sleep better at night because they have purchased the protection of crop insurance, and banks are able to make production loans to folks who might otherwise be judged too risky.

Some think that crop insurance is a freebie. Let me set the record straight right now: It’s not. Farmers have skin in the game when they pay their premiums, which is not pocket change. I bet the farmers I know spend $35,000 to $40,000 every year to purchase their policies. And in many years, they don’t collect a dime.

The reason why food supply in the U.S. remains abundant is that we have tools in place to make sure that when farmers are knocked to their knees by the whims of Mother Nature, they have a policy tool in hand to pick themselves back up and plant again. Let’s make sure that crop insurance remains affordable, viable and available for generations to come, to ensure a continued legacy of abundance in America.

Steve Baccus of Minneapolis, Kan., is the immediate past president of the Kansas Farm Bureau.

New Poll: Americans Overwhelmingly Support Farmers, Farm Policy, Crop Insurance

(OVERLAND PARK, Kan.) – Nearly 90 percent of Americans have a favorable view of farmers, and 92 percent said it was important to provide them with federal funding, according to a new national poll released today.  Furthermore, positive marks cut across party lines, showing that a strong farm policy is a bipartisan issue.

“Americans overwhelmingly like farmers and support the programs that protect them,” explained Jon McHenry, vice president of North Star Opinion Research, the polling firm that explored the general public’s views on farmers, farm policy and crop insurance.  “This response is not surprising when you consider that eight in 10 voters believe a vibrant agricultural industry was critical to the country’s national security.”

More than 70 percent of voters also said they believed that farmers should help fund part of their own safety net.  This cost-sharing structure is at the heart of America’s crop insurance policy, with farmers paying a portion of their insurance premiums and shouldering, on average, 25 percent of crop losses through deductibles.

Those polled were impressed.  Nearly 80 percent said they supported giving farmers discounts on insurance premiums and the vast majority agreed that the current premium and deductible amounts absorbed by farmers were appropriate.

Americans also weighed in on the delivery of crop insurance.  When asked who should implement the system, voters agreed by a 20-point margin that farmers and taxpayers were better served by private companies delivering crop insurance instead of the government.

Support for farm policy and crop insurance even remained high when poll respondents were read a misleading statement often used by farm policy’s critics.

“In a question providing both sides, the security argument in favor of protecting farms wins by a two-to-one margin over the argument used by farm policy opponents,” McHenry said.

The public opinion poll, which was commissioned by the National Crop Insurance Services, is available at www.ncis.staging.wpengine.com.  The phone survey of 1,000 registered voters was conducted April 3-7 and has a margin of error of 3.1 percent.

###

Convo 70

I use crop insurance as a safety net to protect my assets in case of a fallout disaster. Younger producers use it to go to the bank to borrow for operating loans and tell them, ‘I’m protected.’

Convo 70

I use crop insurance as a safety net to protect my assets in case of a fallout disaster. Younger producers use it to go to the bank to borrow for operating loans and tell them, ‘I’m protected.’

Convo 69

Insurance not only allows farmers to face natural disasters and damaging production years without losing everything, but it provides assurance that we can make payments to our banks. The same way any person in this country cannot get a house loan or a car loan without proof of insurance, agricultural banks want the guarantee that farmers can make their payments.

Convo 68

Farmers buy crop insurance for the same reason drivers purchase auto insurance: it offers some degree of stability in times of disaster. Crop insurance has become, in essence, the nation’s insurance policy for the food supply. When Mother Nature strikes and farmers lose their crops, those with crop insurance policies in hand can bounce back and plant again the next year.

Convo 68

Farmers buy crop insurance for the same reason drivers purchase auto insurance: it offers some degree of stability in times of disaster. Crop insurance has become, in essence, the nation’s insurance policy for the food supply. When Mother Nature strikes and farmers lose their crops, those with crop insurance policies in hand can bounce back and plant again the next year.

Convo 67

I believe crop insurance is stronger today for the obstacles it has faced in recent years and most importantly, it is ready to meet tomorrow’s challenges.

Convo 66

Crop insurance, which underpins the nation’s agricultural bounty, works like other kinds of insurance, and it is particularly important in a state like California that has such a diverse and thriving agricultural sector. In fact, for most fruit and vegetable growers it is the only safety net available.

Convo 65

Crop insurance and farm policy enables everyone – from the farmer to the banker to the taxpayer – to plan for those disasters and overcome them when they happen. If lawmakers continue to try and chip away at this safety net, farmers will not have the ability to survive. This is especially true for young, beginning farmers that have less access to credit and capital.

Economists Discuss Farm Policy Amid Falling Crop Prices

(INDIAN WELLS, Calif.)—The U.S. Department of Agriculture, last week, warned that farm incomes would again fall in 2016 because of low commodity prices, continuing a troubling trend in recent years. Top agricultural economists echoed that sentiment yesterday and explained how this reality underscores the importance of farm policy.

“It’s pretty tough sledding out there right now for grain producers,” Washington State University economist Randy Fortenbery said during a panel discussion at an annual meeting hosted by National Crop Insurance Services and the American Association of Crop Insurers. “If you look forward, I think the tough times will extend beyond 2016.”

Fortenbery explained that the high value of the dollar and commodity surpluses around the globe are making things particularly difficult for U.S. agriculture. He also encouraged farmers to “think about risk management” as a way to weather these tough times.

Joe Outlaw with Texas A&M University agreed. “Producers need to spend their money wisely and fine tune their crop insurance protection as much as possible,” he said.

“We are fortunate in this country to have crop insurance and a farm safety net,” Outlaw continued, adding that such policies are essential right now since “prices are below the cost of production for everybody.”

And while low commodity prices harm farmers and rural economies, there are some silver linings when it comes to crop insurance. Because the value of the insured crop is falling, that means insurance premiums are falling as well, which could help lower farmers’ bills and reduce government cost.

Mechel Paggi with California State University, Fresno, explained that this has implications on the international front, too. The 2014 Farm Bill made crop insurance the centerpiece of U.S. farm policy, he said, and as such it will be scrutinized by the World Trade Organization to ensure compliance with international rules.

“U.S. farm policy is coming in well under the support caps agreed to by the WTO,” he said. “With crop insurance costs going down, it would be harder to argue that current policy is a hindrance to foreign trade.”

Furthermore, Paggi noted that existing research shows very weak linkage between crop insurance and producer planting decisions – a key indicator used by WTO when examining countries’ farm policies.

USDA: Public-Private Partnership has Strengthened Crop Insurance and Reduced Waste

(INDIAN WELLS, Calif.)—The current crop insurance system, which depends on cooperation and coordination between private-sector insurers and the U.S. Department of Agriculture (USDA), is working well and serves as an example of how effective such partnerships can be.

That was the message delivered yesterday by Brandon Willis, administrator of the USDA’s Risk Management Agency, at the crop insurance industry’s annual meeting. Willis pointed to the partnership’s track record for eliminating waste, fraud, and abuse as proof of its success.

Occurrences of improper indemnity payments to farmers, which can result from data entry and reporting mistakes, fell to 2.2 percent in 2015, Willis told the group. That’s compared to a 5.5 percent improper payment average for other USDA programs in 2014 and a 4 percent average for programs across all government agencies.

“This demonstrates that the crop insurance program can withstand the scrutiny [from its critics],” Willis explained. “It’s a good story. It tells the story that crop insurance is a well-run program with an error rate far below the government average.”

He added that the USDA and private insurers will continue to identify and address the causes of errors and constantly make improvements to the system.

In addition to efficient and accurate program management, Willis said that the partnership excelled in implementing a complicated farm bill in 2014. In particular, he noted how hard work by both the public and private sectors made it possible to expand coverage options to beginning farmers and ranchers, organic production, and specialty crops.

This expanded coverage has helped crop insurance find new supporters, noted Willis, which will be essential to defending farm policy in the future.

“It’s important that we have a safety net that works for everybody,” he concluded. “Crop insurance has worked…and it is my hope that we can work together…to have a program that we are proud of and that farmers are proud of.”

Senate Ag Chair Encourages Greater Outreach, Education to Counter Attacks on Crop Insurance

(INDIAN WELLS, Calif.) — The Chairman of the Senate Committee on Agriculture, Forestry and Nutrition addressed crop insurers during the annual meeting of the American Association of Crop Insurers and the National Crop Insurance Services and pledged to “preserve, protect, and defend” this public-private partnership against the challenges ahead.

During his keynote speech, Sen. Pat Roberts praised the ability of the industry to work together to stave off cuts to crop insurance that were included in last year’s budget deal noting that agriculture can be a powerful force when it is united.

“I’m proud of the way we all stood up and found a solution,” said Roberts. “Working with Chairman Conaway in the House and what was nearly the entire agriculture industry, we were able to fix a shortsighted legislative cut to crop insurance.”

He also warned that more teamwork would be needed in the days ahead as critics continue to attack this important risk management tool. Additionally, he encouraged crop insurers to double their outreach and education efforts stating that not all lawmakers in Washington understand farm policy.

“My challenge to you today is to find more allies, leave no stone unturned,” said Roberts. “We have to increase the number of voices defending crop insurance both inside the Congress and out in the countryside.”

Roberts explained that he has spent his career working to improve the reach and mechanics of crop insurance while helping to move farm policy away from unbudgeted ad hoc disaster assistance. The 2014 Farm Bill made the most significant changes to reach more producers and commodities than ever before.

“We should all be proud that crop insurance has grown into the number one risk management tool for the majority of farmers and ranchers across this great country,” added Roberts. “Let’s keep their tool box full so they can manage risks on their own operation, stay in business, and pass the farm onto the next generation.”

Crop Insurers Celebrate Past Success, Set Sights on Future

Crop insurers and farmers have shouldered their share of challenges in recent years, ranging from an historic drought to lower-than-expected financial returns, legislative debates, and implementing a new Farm Bill.

But Tim Weber, chairman of the American Association of Crop Insurers and National Crop Insurance Services, said today that those challenges have only strengthened crop insurance providers and better equipped them for the future.

“I believe crop insurance is stronger today for the obstacles it has faced in recent years and most importantly, it is ready to meet tomorrow’s challenges,” he told colleagues at the industry’s annual conference.

Weber, who is coming to the end of his term as chairman, used his remarks to reflect back on lessons learned during pivotal years within the industry – a time, he said, when teamwork and building alliances was emphasized.

“Overall, I am very proud of what we have accomplished,” he said. “These accomplishments were the result of a hard-working, talented workforce that was willing to work together as [insurance providers], agents, adjusters, and industry allies to overcome attempts to weaken our farmers’ and ranchers’ most important risk management tool.”

Weber noted that, despite crop insurance’s past successes and its popularity with farmers, agriculture’s opponents will continue to criticize the farm safety net. He pointed to the recent Bipartisan Budget Act of 2015, which sought to cut $300 million a year from crop insurance, as proof of that criticism and how rural America must counter it.

“Farmers from across the country came to our defense…as did the agent force, the lending community, input providers, Main Street businesses, the conservation world, and leading voices from academia,” he explained. “Notwithstanding this level of support…we would never have won this battle if not for the leadership of key lawmakers who were not bashful about standing up for agriculture.”

Weber urged the group to remain vigilant moving forward by focusing on industry cooperation and collaboration with third-party allies. He also urged insurers to invest time and resources in the political process as a way to blunt future critiques.

“We need all Members of Congress to hear directly from their constituents regarding the importance of maintaining an effective crop insurance program,” he concluded. “After all, every person in this country benefits from a dynamic, financially healthy agricultural industry. Not only does it provide a dependable supply of domestically grown food, fuel, and fiber, but it also supports economic and job growth.”

Convo 64

We are confident that the chair and the ranking member on the Senate Ag Committee — Senators Roberts and Stabenow — will hold the line and be true to their word that those appropriated funds will not come out of the ag committee, or the Farm Bill or even out of jurisdiction in the ag committee. However, there are always attacks on crop insurance and we need to be vigilant with all members of Congress that agriculture paid its fair share negotiating the last Farm Bill. Agriculture donated to help balance the budget. If other sectors of the economy ever gave in the way agriculture already has — we would have a balanced budget. It is unacceptable to us that they come to agriculture first for more cuts and we are going be vigilant and stand against that.

Keep Crop Insurance Out of the Crosshairs

The passage of the 2014 Farm Bill was the beginning of a new chapter in U.S. farm policy, putting to rest most of the old farm support programs and replacing them with a reformed farm safety net and its centerpiece: Crop insurance.

Unlike farm programs of the past, only farmers who purchase crop insurance enjoy its protection. In fact, when a farmer purchases crop insurance, they are handed a bill, not a check. Crop insurance is not cheap by any stretch of the imagination, with farmers paying tens of thousands of dollars per year on premiums for policies that most of them will hopefully not need.

The Farm Bill was a grand compromise. In exchange for $23 billion in spending cuts programs, Congress required market-oriented reforms to commodity programs and made a five-year commitment to ensure the affordability, availability and viability of crop insurance. Unfortunately, anti-farmer groups are targeting crop insurance with proposed cuts that would seriously hamstring the private sector delivery that is the hallmark of success for the program. That would not only threaten to make the system unworkable for farmers, but also endanger the reliability of our nation’s food supply.

Farmers and farm groups value crop insurance because it combines the efficiency of the private sector with the universal coverage of the public sector. Today, virtually any farmer who wants to purchase crop insurance can, and here in Wisconsin, farmers spent roughly $86 million out of their own pockets to do so this year alone. Nationally, that number usually exceeds $4 billion annually.

Remember the historic drought of 2012 that threatened the nation’s heartland and was compared to the dreadful days of the great Dust Bowl? In the past, a disaster of that magnitude would have triggered an overly expensive and completely taxpayer-funded disaster bill. And although those funds were appreciated, they could take months or years to arrive, oftentimes too late to stop a foreclosure.

Things have changed dramatically now that farmers have much improved access to crop insurance, which now protects more than 90 percent of planted cropland. When the drought laid siege to the nation’s heartland, private sector crop insurance adjusters were quickly on the scene, and indemnity checks were usually in the hands of farmers who had verifiable losses in weeks, not months.

Crop insurance worked so well in 2012 that the nation’s farmers bounced back the next year and produced an enormous bounty of grains. And there wasn’t a single call for a disaster bill.

Farmers are the engines that drive the economy of rural America, and without a sufficient safety net in place – like crop insurance – that entire equation is at risk. That is why not only farmers, but ranchers, input suppliers, processors, and equipment companies have all called on Congress to protect crop insurance from any further cuts.

As a farmer, I can tell you that I take great pride in what I do and I understand the important role I play in producing the nation’s food, fiber, feed, and fuel supply. It seems that farmers and consumers alike here in Wisconsin need to remind our congressional delegation of this fact as well.

Tom Gillis is president of the Wisconsin Corn Growers Association.  This op-ed appeared in Wisconsin AgConnection on December 3, 2015

New Crop Insurance Video Tackles Common Farm Policy Misperceptions

Investing in farm policy and crop insurance benefits all Americans, according to a new video released today by National Crop Insurance Services (NCIS).

The two-minute educational piece was made public as Congress works to reverse harmful cuts to crop insurance made during last month’s Budget Agreement.  If those cuts remain in place, agricultural leaders fear it would cripple private-sector delivery of crop insurance, and with it a key component of the 2014 Farm Bill.

Farm policy critics often use misinformation and misperceptions about agriculture to attack crop insurance, and NCIS produced its video to help combat those efforts.

“Instead of getting a check in the mail, farmers now get a bill,” the video explained. “And, because private insurers deliver the system and help shoulder risk, taxpayers aren’t left footing the whole bill when disaster strikes.”

The $4 billion a year farmers now spend to buy insurance protection stands in sharp contrast to the days of direct government payments and $70 billion in disaster bills before crop insurance’s rise to prominence, noted the video.

The piece also tackled the often-misunderstood issue of private-sector returns for delivering crop insurance.  Under a 2011 agreement between the government and crop insurers, 14.5 percent was targeted as an expected gross revenue.

“But those returns aren’t guaranteed and haven’t materialized,” NCIS said in its video.  “Actual gross revenue turned out to be 5.7 percent – not even half the targeted amount.  When you subtract expenses, crop insurers lost 1.4 percent from 2011 to 2014.”

The cuts included in the recent congressional budget package would lower returns by another 38 percent, further compounding private-sector losses and making it extremely difficult for crop insurance providers to stay in business.

“Unless this trend is reversed and the attacks on crop insurance stop, farmers will be left without the tools necessary to manage falling commodity prices and extreme weather,” the video concluded.  “Taxpayers will be left holding the bill once again.  And worst of all, because every American eats, every American will be harmed.”

The full video can be watched here.

Crop Insurance Helps Farmers and Ag Lenders Manage Risk

Weather anomalies have challenged farmers since the earliest days of agriculture. A flood, hail storm or drought can leave a farmer without a harvestable crop at the end of the season. In Central Kansas, producers have been fortunate in the fact that they have not had to endure multiple years of drought or poor production. However, neighboring areas such as Southwest Kansas, Oklahoma and Texas and areas further west have not been so lucky. There is no doubt that crop insurance has helped some farmers stay in business through the tough times.

The United States has learned in hindsight that providing retroactive disaster relief is not only destabilizing for farmers but expensive for taxpayers. Prior to our current crop insurance system, it could have taken months if not years for farmers to receive relief payments following a disaster. While the support did not go unnoticed, there were many instances when the payments came too late to save a farmer from insolvency.

It is a fact that strong farm policy and support for crop insurance goes beyond the farmer, not only benefitting rural America but consumers as well. In the 2014 Farm Bill, crop insurance was recognized as the primary risk management tool for farmers, shifting a good share of the risks associated with farming away from the American taxpayer.

The key to a viable crop insurance system is the public-private partnership that makes it the success it has been. The private sector sells and services crop insurance policies and farmers pay premiums and have deductibles, just like other insurance policies. To incentivize farmers to buy crop insurance, the government partially discounts premiums to ensure that coverage is affordable, available to everyone, and economically viable.

Lenders also play a role in encouraging farmers to make informed decisions about managing their operating risk. At Central National Bank, we are agriculture lenders as well as licensed crop insurance agents. We encourage all of our farmer customers to protect their investment with crop insurance and as a financial institution, we may even be able to offer better loan terms to a producer that implements a solid risk management program.

It is important to keep in mind that crop insurance is a risk management tool, not a profit center. Some have charged that farmers would rather collect a crop insurance check than a good harvest.  Nothing is further from the truth.  Simple math suggests that “playing the crop insurance game” is not a sustainable business plan. In 10 years of working with producers, I’ve yet to meet anyone who would rather collect a crop insurance check than harvest a good crop.  

 As we enter into a period of declining margins, it will be important for producers to review all aspects of their operation, including risk management programs.  Recently, the farm economy has seen double-digit declines in net farm income as well as increases in the number of short-term operating loans. Having access to viable risk management tools will not necessarily add to the bottom line, but it is important for producers to utilize tools such as crop insurance to protect revenue streams through a possible prolonged downturn in the farm economy.

Not only does a well thought-out crop insurance plan speak to a producer’s management skills, but crop insurance also provides a backstop so producers are able to meet their financial obligations. Ensuring farmers have access to affordable, viable crop insurance options is not only critical for the farm business, but it will certainly impact future ag lending decisions in terms of assessing operating risk for loans.

Aaron Gasper is an agriculture and commercial lender at Central National Bank in Salina, Kansas.

Crop Insurance Helps Farmers and Ag Lenders Manage Risk

Weather anomalies have challenged farmers since the earliest days of agriculture. A flood, hail storm or drought can leave a farmer without a harvestable crop at the end of the season. In Central Kansas, producers have been fortunate in the fact that they have not had to endure multiple years of drought or poor production. However, neighboring areas such as Southwest Kansas, Oklahoma and Texas and areas further west have not been so lucky. There is no doubt that crop insurance has helped some farmers stay in business through the tough times.

The United States has learned in hindsight that providing retroactive disaster relief is not only destabilizing for farmers but expensive for taxpayers. Prior to our current crop insurance system, it could have taken months if not years for farmers to receive relief payments following a disaster. While the support did not go unnoticed, there were many instances when the payments came too late to save a farmer from insolvency.

It is a fact that strong farm policy and support for crop insurance goes beyond the farmer, not only benefitting rural America but consumers as well. In the 2014 Farm Bill, crop insurance was recognized as the primary risk management tool for farmers, shifting a good share of the risks associated with farming away from the American taxpayer.

The key to a viable crop insurance system is the public-private partnership that makes it the success it has been. The private sector sells and services crop insurance policies and farmers pay premiums and have deductibles, just like other insurance policies. To incentivize farmers to buy crop insurance, the government partially discounts premiums to ensure that coverage is affordable, available to everyone, and economically viable.

Lenders also play a role in encouraging farmers to make informed decisions about managing their operating risk. At Central National Bank, we are agriculture lenders as well as licensed crop insurance agents. We encourage all of our farmer customers to protect their investment with crop insurance and as a financial institution, we may even be able to offer better loan terms to a producer that implements a solid risk management program.

It is important to keep in mind that crop insurance is a risk management tool, not a profit center. Some have charged that farmers would rather collect a crop insurance check than a good harvest.  Nothing is further from the truth.  Simple math suggests that “playing the crop insurance game” is not a sustainable business plan. In 10 years of working with producers, I’ve yet to meet anyone who would rather collect a crop insurance check than harvest a good crop.  

 As we enter into a period of declining margins, it will be important for producers to review all aspects of their operation, including risk management programs.  Recently, the farm economy has seen double-digit declines in net farm income as well as increases in the number of short-term operating loans. Having access to viable risk management tools will not necessarily add to the bottom line, but it is important for producers to utilize tools such as crop insurance to protect revenue streams through a possible prolonged downturn in the farm economy.

Not only does a well thought-out crop insurance plan speak to a producer’s management skills, but crop insurance also provides a backstop so producers are able to meet their financial obligations. Ensuring farmers have access to affordable, viable crop insurance options is not only critical for the farm business, but it will certainly impact future ag lending decisions in terms of assessing operating risk for loans.

Aaron Gasper is an agriculture and commercial lender at Central National Bank in Salina, Kansas.

History demonstrates the importance of a farm safety net

If my family had kept the farm, I would have been a fourth-generation farmer of a grain operation. But they couldn’t.

The ’80s were not kind to us, and my family made the difficult decision to exit the business. They were not alone. Some statistics show public farm auctions numbered around 500 a month during the darkest days of the decade, with hundreds of thousands of farmers defaulting on their loans. Nearly 2,000 banks failed or received assistance through the Federal Deposit Insurance Corporation between 1980 and 1994, which is more than any other period since the FDIC was created.

Watching my family and neighbors go through this kind of torment made an impression. It’s one of the reasons I am passionate about what I do today. It is a high priority for me as an agricultural banker to do everything I can—not only as a provider of capital and traditional banking products, but a provider of expertise and counsel—to help farmers make the right decisions about their operations. I want them to be prepared for a crisis.

Fortunately, for farmers today there are more tools available to manage the risky business of farming than there were a few decades ago. One of those tools is crop insurance, which has improved significantly through the years to become one of the key pieces of the farm safety net. Farmers have to invest so much money to grow a crop that they rely on banks for operating loans. Banks would have a hard time making those loans without assurance farmers would have a way to pay it back if a natural disaster struck. Crop insurance enables everyone—from the farmer to the banker—to plan for those disasters.

Additionally, crop insurance is structured in such a way that spreads risk across a large and diverse pool of participants so that the impact of losses from a disaster is minimized. That’s because it is widely available and affordable for producers all across the country regardless of their farm size. Without this kind of farm safety net for all of our farmers, large production losses could set in motion a series of events reminiscent of the 1980s when farms failed and banks were stressed to the point of shutting down.

Therefore, it’s critical crop insurance remain intact. Something that seems harder and harder to do in today’s political environment where opponents are determined to destroy the one thing farmers can count on during tough times.

We saw their work in full force during the latest budget agreement that was negotiated at the last minute and included cuts to crop insurance. Thankfully, the agricultural community responded in equal force and demanded the cuts be reversed. Lawmakers are expected to address this provision in the next omnibus spending bill.

We do not want to repeat the mistakes of the past where harsh economic conditions combined with an inadequate safety net caused producers to leave the farm altogether. Right now, we have farm policy in place that encourages sound risk management practices and helps farmers to position themselves for the future.

In the midst of the crisis as he signed the 1985 farm bill, President Ronald Reagan said, “This country is nothing without the farmer, and those who work the land have the right to know that there’s a future in farming. Their children have the right to know that they’ll still be able to work the family farm generations from now and make a decent living.”

By then it was too late for my family and countless others to continue farming, but if we’re smart, we’ll learn the hard lessons from the past so future generations can continue.

Indeed, we are nothing without farmers. And, they can’t survive the vagaries of the business without sound farm policy.

Nate Franzen is the President of the Agribusiness Division at First Dakota National Bank in South Dakota. He has worked in agricultural banking for more than two decades.