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Crop Insurance a Key for Producers

The Pueblo Chieftain | April 2015

My husband and I have been farming in Southeastern Colorado for more than 40 years, and during that time it’s safe to say there have been a lot of changes not only in farming practices but also in farm policy.

The biggest policy change through the years has been the affordability and availability of crop insurance.

When we first started farming, crop insurance was not an option because we couldn’t afford it.

It wasn’t until Congress made reforms to the program a couple of decades ago that we were able to participate. Additional reforms through the years have made crop insurance more widely available for a variety of crops, regardless of farm size or method of production.

It is still an expensive part of the operation, but it is a necessary part because it provides us with stability — something we can count on. This is helpful not only when we need to show our lender at the bank what our estimated income will be, but also for our own peace of mind.

You have to realize that out here, we can have a beautiful crop and phenomenal yields one year and then get wiped out by a hailstorm or drought the next.

For the last three years, the ongoing drought and the late spring freezes have dogged our crops. With crop insurance, we have been able to level out the highs and lows so we can make it to another year.

The enactment of the 2014 Farm Bill made crop insurance the centerpiece of the farm safety net — and for good reason. It is an effective risk-management tool for not only farmers, but also for taxpayers.

Gone are the days of large, unbudgeted disaster bills aimed at helping farmers when natural disasters strike. Now, because of crop insurance, everyone — policymakers, farmers and bankers — can plan and budget for those disasters.

Recently, there has been talk in Washington about yet again trying to make changes to crop insurance. This is arising just one year after the Farm Bill was enacted.

Specifically, there have been discussions about cutting the premium support that farmers receive for purchasing crop insurance. This does a disservice to everyone.

If such proposals succeed, it would only serve to increase the costs to farmers and undermine their ability to manage risk. As my husband and I can attest, premium support has helped us to afford crop insurance, which, in turn, has helped our overall farming operation.

Each new farm bill ushers in new changes to farm policy. We’ve experienced those changes firsthand, but the one part that should remain constant going forward is crop insurance. It is the key to a steady, safe food production system in the U.S. The beneficiaries of crop insurance are not just farmers but also consumers.

Cathy Scherler is the president of the Colorado chapter of Women Involved in Farm Economics (WIFE), a national non-partisan organization committed to improving the profitability and production of the agricultural industry. She and her husband grow wheat, grain sorghum, sunflowers and corn on their farm in the Eastern Plains. This op-ed appeared in The Pueblo Chieftain on April 11, 2015.

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It was 2010 and I was expecting to harvest my best crop. I had done everything right and the weather had been kind. Or so I thought. Then on a late October night, it hailed for six hours and what was anticipated to be my best crop year turned into nothing. But the worst of it was yet to come. It stopped raining. It stopped for 336 days straight. It kicked off what would be the worst drought since the 1950s. The conditions would improve slightly, but it’s not an exaggeration to say that for the last five years, my part of the world—West Texas—has essentially been on fire.

Mother Nature is the toughest, most unpredictable boss. Farmers are resilient and they adapt, but a safety net is crucial to their survival. And, it’s not a safety net if it’s not affordable.

That’s what today’s crop insurance offers farmers. A safety net that is both affordable and widely available. It’s what’s helped me make it to the next year.

That hasn’t always been the case. When crop insurance got its start in the 1930s, it was a poorly run government program. It hobbled along through the 60s and 70s, but the premiums were too high so the participation was low with limited available coverage. Farmers mainly relied on costly ad hoc disaster assistance when natural disasters wiped out their crops. It was so ineffective that the Secretary of Agriculture, Bob Bergland, told Congress in 1977 that disaster programs “are for the most part…a disaster.” This gave birth to the Federal Crop Insurance Act of 1980 that created a successful public-private partnership that remains today. Since then there have been other pieces of legislation along the way that have made additional improvements to the delivery and mechanics of crop insurance with the most recent being the 2014 farm bill.

Sadly, there are some who don’t know or understand the history and improvements that have taken place through the years. Meanwhile, there are others who are bent on attacking farm policy regardless.

I was reminded of this on a recent visit to Washington, D.C. where I met with lawmakers and staff on behalf of producers across the country. Each time I visit I am struck by how important outreach is to ensure agriculture remains successful in this country and that crop insurance remains a viable, affordable and widely available safety net for farmers and ranchers.

I tend to walk away both encouraged and discouraged by my visits. I am encouraged because there are some who understand the challenges that we face and discouraged because there is always more to be done. The battle never ends, and we need more voices in support of American agriculture.

Our form of government requires participation. When we don’t show up and tell our story then, without a doubt, someone who doesn’t understand or care about production agriculture and the importance of crop insurance will fill the void.

We’ve each sat in the tractor cab or with our neighbors in the coffee shop and talked to ourselves about how to make things better, but that’s not the way to drive real change in Washington or anywhere else. Sometimes you have to get off the tractor and reach out beyond those circles in your own community.

We can’t assume policymakers understand the anxiety we feel when we’re days away from harvesting a good crop and it’s destroyed in a matter of minutes by something beyond our control. We can’t assume policymakers know the one thing that enables us to start again is crop insurance. It’s up to us to tell them.

—Wade Cowan is the president of the American Soybean Association. He farms soybeans, guar, cotton, wheat and grain sorghum in West Texas.  This op-ed appeared in the High Plains Journal on March 31, 2015.

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Pop quiz: Next to tourism, what Florida industry is the state’s largest employer?

The answer isn’t health care, transportation, technology or even government. Agriculture is Florida’s second-biggest job supplier, according to the University of Florida.

“Two million jobs can be traced to the state’s agriculture, natural resources and related food industries — and not just on our 47,500 farms. Income from $142 billion in annual sales gets spent around the state to create jobs in restaurants, department stores and car dealerships, too,” Jack Payne of the University’s Institute of Food and Agricultural Sciences said during a recent media interview.

Despite their importance, farmers and all they support are at the mercy of a multitude of uncontrollable forces.

A year of hard work and investment can be wiped out in an instant by a late-season hurricane, an early frost or an unexpected outbreak of insects or plant disease.

And the ever-looming prospect of a changing climate could be “potentially catastrophic,” according to Payne, as it wreaks havoc on water supplies, soil conditions and land use.

So how do farmers gain some control over the uncontrollable and add stability to the region’s economy?

Crop insurance is key.

Read more here.

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Tom ZachariasPop quiz: Next to tourism, what Florida industry is the state’s largest employer?

The answer isn’t health care, transportation, technology or even government. Agriculture is Florida’s second-biggest job supplier, according to the University of Florida.

“Two million jobs can be traced to the state’s agriculture, natural resources and related food industries — and not just on our 47,500 farms. Income from $142 billion in annual sales gets spent around the state to create jobs in restaurants, department stores and car dealerships, too,” Jack Payne of the University’s Institute of Food and Agricultural Sciences said during a recent media interview.

Despite their importance, farmers and all they support are at the mercy of a multitude of uncontrollable forces.

A year of hard work and investment can be wiped out in an instant by a late-season hurricane, an early frost or an unexpected outbreak of insects or plant disease.

Read more…

This op-ed by Tom Zacharias, president, National Crop Insurance Services, appeared in the Fort Myers News-Press on February 6, 2015.

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In many parts of Oklahoma, it seems like wheat farmers just can’t catch a break.

Not a one.

A late spring freeze, combined with excessively dry or extreme drought conditions throughout the winter and into spring have left many of the state’s wheat fields badly stressed or a complete bust. In fact, I’d say this is the worst I’ve ever seen, and I started farming here in the mid 1950s.

With the wheat harvest set to begin in about a month, farmers are expected to harvest about 40 percent less wheat this year than they did in 2013. The low soil moisture as we head into the hottest and driest months of the year has left many farmers wondering what they are about to go through.

For the state’s farmers who purchased crop insurance – and nowadays that’s nearly all of them – that will be their only saving grace. I don’t know of a farmer anywhere in Oklahoma who doesn’t buy crop insurance. It’s just like buying diesel fuel today…you don’t farm without it.

With the passage of the new Farm Bill, largely gone are the days of the Federal government stepping in and helping farmers who have been hit by a calamity.

Such bills cost taxpayers tens of billions of dollars in the past, and were not only expensive but also slow to deliver the help to the farmers who needed it. Today, when a farm crisis hits, farmers turn to their crop insurance policy, not the Federal government, for help. The public-private partnership that is today’s crop insurance ensures that farmers get the financial help they need in weeks, not years.

As a crop insurance agent, I can tell you firsthand that crop insurance is no small expense for most of the state’s farmers, who spend north of $20,000 a year purchasing policies that they pray they will not need. Of course there are smaller farmers and larger farmers, whose premiums exceed $70,000, but the point is that it isn’t cheap.

Farmers buy crop insurance today just like they buy homeowners and car insurance. And when what looks like a promising year turns into a bust, the only thing standing between some farmers and bankruptcy is their crop insurance policies.

Last year, Oklahoma farmers spent more than $91 million out of their own pockets to purchase the peace of mind and protection of crop insurance.

Crop insurance allows individual farmers to purchase the coverage they need, tailored to their farms, their financial standing and their tolerance to risk.

For farmers who rely on loans to operate – and that’s a lot of farmers – crop insurance has become a bank’s best friend. In fact, the best collateral you can take to a bank when you are seeking a loan is your crop insurance policy. The bank will often co-sign the policy with the farmer, and in doing so, they are assured that part of their loan is covered, regardless of weather or price swings.

Crop insurance is not only smart farm policy, but smart consumer policy as well. American consumers have come to see our affordable, abundant food supply as a birthright. In fact, most of us alive today have never seen wide-scale hunger in this country. But much of what we take for granted could quickly disappear if we allow our farmers to fail and were forced to import our food, fiber and fuel. That is not a position many of us would choose to be in and it underscores the fact that having a strong farm sector is a national security issue.

While this might be the worst drought I’ve ever seen, I have to say that my faith in the resilience and work ethic of Oklahoma’s farmers is undying, and I know that with their crop insurance policies as a backstop, our farmers will bounce back from this. When Congress addresses crop insurance in the next Farm Bill five years down the road, I hope it is to protect the public-private partnership that has made it successful and to further improve and expand its protection.

Max Claybaker is a farmer and a crop insurance insurance agent from Blackwell, Oklahoma.  This op-ed appeared in The Oklahoman on June 1, 2014.

 

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Crop Insurance Helps NC Farmers Weather the Ups and Downs

Fayetteville Observer | December 2013

From rags to riches. From feast to famine. From pauper to prince. We’ve all heard the phrases to describe going from one extreme condition to the opposite. But farmers in North Carolina understand this concept first hand. Unfortunately.

In 2011, just about every imaginable weather disaster hit the state. It started with frigid cold, moved on to a sweltering heat wave, interspersed with a historic tornado outbreak and then hurricane flooding.

In 2012, started out with much of the state experiencing a severe drought, but thankfully Mother Nature eventually dealt a kinder hand to farmers in the Tar Heel state than most of the rest of the county, who experienced the worst drought since the Dust Bowl.

This unending rollercoaster of weather extremes underscores the reason why year after year, farmers across the country happily purchase crop insurance to help mitigate the unknowns that are never far from hand. In the past, disasters like these would have triggered large disaster relief bills, much like what was passed after…

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