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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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Crop insurance helped make this years bounty possible

Springfield State Journal | September 2013

By Tim Totheroh

photoI’ve been a farmer all my life. I’m also a crop insurance adjuster, which means last summer was a busy time for me.

By the end of harvest claims last year, I visited more than 200 farms, meeting with the farmers, inspecting their losses and adjusting their crop insurance claims. It was sad at times because farmers take crop losses personally.

I’ve never seen anything like what I witnessed last summer in Illinois. In one field, I walked a half-mile through the field and walked the half-mile back in another part of the field, and I never saw a single ear of corn. Not one ear.

Some varieties of corn did better than others, and Mother Nature was kinder to some farmers than to others. When all was said and done, we ended up with about half of a normal corn crop at harvest. Even with half of a harvest, farmers still had a full tab of bills to pay.

I’ll never forget the faces of young farmers shaken by the sight of their year’s income slowly withering in the…

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The new face of farm policy: crop insurance

Farm Bureau News | August 2013

By Andrew Bowman

Aug. 2, 2013-From walking on soil baked into near-concrete during the worst drought in over 50 years in 2012, to dredging across flooded fields this soggy spring, farmers continue to face uncertainty. And that’s just weather. As a 27-year-old farmer, I’m starting to wonder what “normal” even means.

Andrew Bowman photoIn my short career, corn prices have been under $2 and over $8 per bushel, land prices have nearly tripled since I purchased my first field, more regulations point to greater expense without offsetting revenue, and farm policy has evolved from focusing on price supports and direct payments toward a more market-oriented risk management tool called crop insurance, a public-private partnership whereby farmers purchase policies and only receive a payment if there is a documented loss. Given our new “normal” characterized by volatility everywhere-in weather, markets and regulation-farmers would struggle without access to crop insurance, a vital tool for rural America and the new face of farm policy.

The farm bill, which will guide American agriculture for the next five years, is currently being debated in Congress. Current farm bill proposals eliminate direct payments, which are cash subsidies based on historical price figures. Price support mechanisms still exist, but are much reduced-corn and soybean price supports as proposed in the House are 72 percent and 75 percent of the 2008-2012 Olympic Average Price, respectively, and the Senate version is even lower at 55 percent for both crops. These programs are less necessary because crop insurance has assumed the role as the primary risk management tool for farmers.

Crop insurance saves taxpayers’ money. When disasters struck in the past, recovery was paid for completely by taxpayers. And that doesn’t include the other trade-distorting supply controls and price support policies enacted in response to farm crises. Last year, in contrast, when farmers here in Illinois were decimated by drought, we had crop insurance and didn’t need a disaster bill to help us plant this year.

It is a vast improvement over the price support system and direct payments of the past. Farmers must put “skin in the game.” Many even complain about the money lost over the years purchasing crop insurance. Moreover, we lose a hefty deductible-15 percent minimum-before any claims are paid out. Last year, this deductible was $12.7 billion. Coupled with $4.1 billion in premiums paid last year, farmers lost or paid nearly $17 billion before crop insurance kicked in. It’s a major expense for us, but one we’re happy to pay for because it gives us something this new “normal” rarely allows: peace of mind. From the federal government’s perspective, it may be a liability, but the public-private partnership means taxpayers and farmers also shoulder the rewards in the form of underwriting gains during good years. In fact, from 2001-2010, the government saw $3.99 billion in gains.

And the benefits extend to rural communities. The average American farmer is 58, the oldest at any time in our history. Assuming most retire at 65, we are seven years from real problems if we don’t start transitioning to the next generation. Crop insurance helps young farmers because it serves as “stop-loss” collateral to back credit-a crucial transition tool given the high capital costs of farming. In this sense, it is a bridge to the future for America’s farmers.

Crop insurance also supports farmers’ working capital, allowing cash to flow back into the economy. Farmers in other countries need to stockpile a large share of their profits into cash reserves planning for a bad year so they have sufficient liquidity when disaster strikes. Because American farmers have crop insurance, they don’t need enormous cash reserves and can instead reinvest profits. I have paid down debt and invested in newer, more sustainable technologies faster because crop insurance covered the risk…

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Crop Insurance Helps State Farmers Through Bad Years

The Hartford Courant | August 2013

By TOM MARCH | OP-ED

For fresh fruits and vegetables, there has been a recent convergence of trends and preferences that bode well for the industry.

The first is the federal government’s decision to ensure that more fresh fruits and vegetables are consumed in school meal programs, which will expose children who otherwise have limited access to these important foods. The other trend is the locavore — or eating local — movement, which underscores the importance of buying local and eating fresh produce.

But to ensure that fresh fruits and vegetables are available for a population that is increasingly asking for them, we need to have wise public policies in place to help the farmers here in Connecticut and elsewhere who grow these important foods to manage the risks brought on by Mother Nature…

 

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By Steve Umlor

The affordability and bounty of the American food system did not occur by happenstance. It took wise policies supported by dedicated officials, hardworking farmers willing to risk their fortunes and a first-rate transportation and distribution system.

Many of the policies that underpin food production chiefly support the major food and feed commodities like corn, wheat and soybeans. But for those of us raising specialty crops – those fruits, vegetables and nuts that are an important part of our diet – there’s only one major risk management tool available: crop insurance.

Crop insurance is a public-private partnership whereby farmers purchase their own policies to cover the risks they choose to pay for. Michigan’s farmers face a huge amount of risk on a daily basis, including early frosts, drought, floods and market…

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