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As someone who has spent more than four decades managing a fourth-generation farm and the past 10 years building my family’s crop insurance agency, I believe I have valuable perspective worth sharing regarding how essential today’s federal crop insurance policies are to America’s farmers and consumers.

Specifically, I would like to explain how essential the Harvest Price Option has become to the modern agricultural producer.  The Harvest Price Option insures a crop at its actual harvest-time value. Think of it like a homeowner’s insurance policy. If your home appreciates in value after you purchase it, you are protected at the home’s current value if it burns down and you have to rebuild.

Unfortunately for agriculture, this policy that makes rebuilding possible has come under fire from those who misunderstand the unique risks for farmers who are constantly exposed to the ravages of Mother Nature. It is important to note that farmers pay an additional premium for this type of protection and it supports their risk management in two distinct ways.

First, a farmer often prices a large percentage of his anticipated – or before harvest – crop using forward price contracts with a local elevator. If a natural disaster strikes causing production to fall short of the quantity sold, the farmer would need to purchase enough of the crop to fulfill his contractual obligation. But, the price of the commodity is likely to have increased because of the overall drop in production due to the disaster. Consequently, the remaining crop available to purchase is priced much higher than what was covered under the spring contract.

By purchasing the Harvest Price Option as part of his crop insurance policy, the farmer is able to meet his contractual obligations either by buying grain to deliver under the contract or by making a financial settlement with the purchaser.

A second way the Harvest Price Option becomes essential to producers is if the grain being produced is intended to support the farm’s future animal feed needs. If a natural disaster destroys the grain that is to be harvested, then the producer will be forced to purchase feed instead.  If there is a widespread short crop, the feed costs will be much higher.  With the Harvest Price Option on the producer’s crop insurance policy, the farmer will be paid the actual harvest price on his lost production.  This, in turn, allows him to purchase the feed needs for his livestock operation and still maintain a viable business.

In fact, allowing farmers to maintain a viable business when the unexpected happens is what crop insurance is all about.  The beneficiary is not just the farmer, but also the American consumer. Crop insurance enables farm families like mine to pick up the pieces after a disaster and continue to produce food and fiber without significant price increases or supply shortages for consumers. The fact that Americans spend less of their disposable income for food than any other country speaks volume as to how critical it is that farmers have risk management tools like crop insurance.  The critics would do well to try to understand the link between a viable crop insurance program and an affordable, stable food supply before proposing measures that would destroy it. In other words, before biting the hand that feeds them.

Gary Riekhof is a farmer and crop insurance agent from Higginsville, Missouri.  This op-ed appeared in the Columbia Tribune on June 6, 2015.

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“Frost threatens northern U.S. corn; rains soak southern Plains.”

This recent headline says it all. The diversity of American agricultural production coupled with the varied growing conditions across the country and the swings in weather explains why farmers need a safety net. More importantly, it describes why crop insurance is the centerpiece of the farm safety net.

U.S. multi-peril crop insurance is a risk management tool that farmers, regardless of their location, crop, or production method, purchase to protect against the loss of their crops due to natural disasters such as hail, drought, freezes, floods, fire, disease, or the loss of revenue due to a decline in price. Farmers buy policies to fit the individual needs of the their operations. In 2014, 1.2 million policies were sold protecting more than 120 different crops covering 294 million acres.

I have been farming corn and soybeans for about three decades and I have always purchased crop insurance because it gives me some peace of mind even though we are in a climate setting that typically doesn’t experience wide weather extremes like some of our neighbors in other parts of the country.

That’s not to say we haven’t been hit with our share of unpredictable weather that made planting and harvesting a crop challenging. It does mean I customize the policy I purchase to meet the needs of my operation.

For example, just two years ago, we had a hard time getting a crop in the ground because nine inches of snow blanketed the area on the second day of May, which is normally the time when we’re wrapping up the planting season. The soil was already soaked from a rainy spring season. That year we didn’t start planting until the middle of May and didn’t finish until the first week in June.

Late planting can potentially put a farmer in double jeopardy – not only are they expecting lower yields because of the delay in planting, but that crop is also vulnerable to frost around the autumn harvest time.

This was the first time in more than 20 years of farming that we planted corn in June – more than a third of our crop. It was also the first time we elected to take prevented planting provisions for roughly 5 percent of our acres as part of our crop insurance policy. Prevented planting provisions are designed to provide coverage when extreme weather conditions prevent a farmer from getting in the fields.

Crop insurance helped us cover some of the loss from that bad year. It made it manageable, which is why it’s an essential risk management tool for my farm and others like mine all across the country. The cost of growing crops has increased substantially. It wasn’t too long ago that it took about half of what it takes to grow an acre of corn. Because of these costs, a substantial crop loss would be a major financial setback for anyone. With crop insurance, we are able to level the highs and lows.

There have been a lot of changes to farm policy through the years to reflect the changing times, but given the diversity of agriculture in our country and the way crop insurance can be uniquely tailored to address disastrous conditions in an efficient and effective way, it should only be strengthened in the years to come.

Bruce Peterson is a farmer from Northfield and the president of the Minnesota Corn Growers Association. This op-ed appeared in The Hill on June 3, 2015.

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When the 2014 Farm Bill became law, it marked a pivotal moment in the history of U.S. farm policy.   The new Farm Bill eliminated direct payments and reduced some of the price support policies of the past in favor of expanding crop insurance, which allows farmers to purchase varying levels of protection for their crops.

Gone are the days when farmers got a check every year regardless of weather or market conditions. Gone are the days when large-scale natural disasters would trigger wildly expensive disaster bills aimed at helping farmers get back on their feet.  From here forward, farmers who want risk protection will receive a bill, not a check, when they sign on the dotted line every year.

This is a good thing for several reasons.  First, crop insurance ensures farmers have a risk management plan in mind early in the year.  In addition to that plan, they must put their money towards purchasing a crop insurance policy.  This is no small amount of money for many farmers, who in 2014 spent roughly $3.8 billion on crop insurance premiums.

All told, those policies protected 295 million acres of farmland valued at $129 billion.  Today, 90 percent of planted cropland is protected by federal crop insurance, which protects more than125 different varieties of crops in all 50 states.

The evolution to crop insurance has effectively moved risk management away from the public sector, funded exclusively by taxpayer dollars, and toward the private sector, where farmers and crop insurance companies help shoulder part of the cost of natural disasters.   This is good for taxpayers because it takes them off the hook for the entire bill when disaster strikes, good for farmers who must always keep their risk management plan in mind, and good for rural America because farmers are the engines that generate economic activity.

Crop insurance has been around since 1938, but it wasn’t until Congress decided to make it affordable and ubiquitous that farmers really began to sign up.   And when disaster struck – as it does nearly every year somewhere here in the Northwest – farmers turned to their crop insurance policy and their insurance company, not their member of Congress, for help.

The demographics of farming can be rather scary, with the age of the average age of the nation’s 3.2 million farm operators at 58 years old and rising daily.   For young and beginning farmers, access to affordable and reliable crop insurance is honestly a make-or-break issue.  For those just entering farming, the costs are high and their ability to sustain a loss is very limited.  For them, purchasing a crop insurance policy not only protects their crops, but their careers paths as well.

Crop insurance is very popular here in the Northwest, with farmers and ranchers in Washington, Oregon and Idaho spending more than $96 million out of their own pockets last year to purchase the peace of mind offered by crop insurance.  Those policies protect the region’s apples, potatoes, sugar beets and a long list of other crops from the ravages of Mother Nature and volatile market swings.

In the old days, farmers largely relied on disaster assistance from the federal government in times of crisis.  According to the Congressional Research Service, some forty-two ad hoc disaster assistance bills cost taxpayers $70 billion since 1989.

With access to affordable, available and viable crop insurance policies, farmers have the backstop they need to bounce back when our rapidly changing climate throws them a curve ball.  That’s good for farmers, good for consumers who eat their produce, and good for the rural economy, which is largely supported by local farmers and ranchers.

Kent Wright is president of Northwest Farmers Union.  This op-ed appeared in the Tri-City Herald on May 30, 2015.

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Crop insurance products were improved in the recent farm bill because Congress recognized that these products are a necessity for farmers, regardless of size. To me, a federally-supported crop insurance policy is defensible because a portion of the product’s cost is borne by the farmer.

I am one of those farmers. I raise cotton, corn, soybeans, wheat, peanuts and cattle in north Mississippi. Crop insurance is my most important risk management tool absent the direct payments that were available under previous farm law programs. Effective crop insurance products have allowed Congress to move away from providing ad hoc disaster assistance, thus reducing pressure on the federal budget.

We all have witnessed how farmers across the country have suffered from historic droughts, flooding, hail and other severe weather. Many cotton producers, in fact, have incurred particularly excessive yield losses the past three years from these weather events.

Without a doubt, the volatility of weather and commodity markets necessitates government assistance with crop insurance premiums so that our nation’s farmers have access to affordable and dependable crop insurance products.

Regarding cotton, the Stacked Income Protection Plan, known as STAX, is an insurance product that was included in the 2014 federal farm law and is available to upland cotton producers beginning with the 2015 crop year.

The U.S. cotton industry believes that STAX, like all other insurance products, should not be subjected to limits or eligibility restrictions. With cotton’s safety net now comprised solely by the marketing loan program and crop insurance, the U.S. cotton industry is especially concerned by any attempt to eliminate or place limits on key crop insurance tools.

The bottom line is that America’s farmers need an affordable and dependable insurance policy if they are going to continue producing safe, abundant, and affordable food and fiber – which is essential to our national security. Affordable and dependable crop insurance will provide the stability needed for U.S. cotton producers – and undergird an industry that provides employment for some 200,000 Americans and produces direct business revenue of more than $27 billion. Accounting for the ripple effect of cotton through the broader economy, direct and indirect employment surpasses 420,000 workers with economic activity well in excess of $100 billion.

Sledge Taylor is a farmer from Como, Miss., and chairman of the Memphis-based National Cotton Council of America.  This op-ed appeared in the Southeast Farm Press on May 21, 2015.

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No crop insurance would mean no food

The Spokesman-Review | May 2015

We are blessed in this country to have the ability to grow our own food and have enough to export to other nations.

In fact, that is what inspired me to farm. I had a passion for growing food and, in the case of my home state of Washington where wheat is a highly exported commodity, I had the satisfaction of knowing that my work as a farmer contributed to feeding people not only at home, but all across the globe.

The food security we enjoy in this country is made possible in no small part through United States farm policy. With the 2014 Farm Bill, Congress shifted the focus of farm policy to risk management. It made crop insurance the centerpiece, and quite rightly. It helps farmers recover from natural disasters and volatile market fluctuations. It enables them to plan and budget for the long term in the most effective and efficient way.

Farming is an inherently risky business. Even my wheat farm, which is located in the rolling hills above the Palouse River, and considered some of America’s most fertile ground, is vulnerable to serious weather events that can devastate my crops in any given year. I have been farming for more than three decades and I can say, without question, if it weren’t for crop insurance I would not be in business.

And, crop insurance is good for consumers and taxpayers, too.

Without effective and affordable crop insurance, catastrophic production losses would sap the rural economy by setting in motion a series of harmful events: farm failures and consolidation, job losses, financial stress on rural banks and reduced investment in U.S. agriculture.

Emergencies can happen to all of us. There have been enormous emergency bailouts for victims of floods, hurricanes, earthquakes and other disasters. But because of modern crop insurance, farmers have survived some of the worst production years in memory without that kind of disaster relief. Crop insurance fills the need.

This reality is why I am always concerned by those who criticize farm policy or, worse, advocate for its demise, usually by spreading misinformation about the cost and mechanics of farm policy and crop insurance.

One of the misconceptions is that crop insurance is a handout to farmers. Actually, farmers spend $4 billion a year out of their own pockets for insurance protection. They only collect an indemnity after they’ve suffered a verifiable loss and they’ve shouldered their deductible.

Another attack includes barring farmers with large operations from participating in crop insurance. This would be foolish policy because any risk management pool needs a large and diverse group of participants. We want the most productive farmers in the pool to spread the risk. In the same vein, car insurers want safe drivers to buy insurance to help balance losses from more accident-prone drivers.

A financially healthy rural economy requires a financially healthy farm production sector. And that sector relies on a safety net when catastrophic events happen. It is a modest investment considering the return, which is a stable and affordable national food and fiber supply.

Brett Blankenship is the president of the National Association of Wheat Growers. He farms winter wheat in southeast Washington.

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I started farming and ranching with my father and grandfather in southwest Oklahoma and the Texas panhandle 40 years ago, and I am the fourth generation to farm cotton, peanuts, wheat, corn, milo and cattle on our family’s land.

I was 17 when I started farming on my own, and although I have four decades of experience under my belt, the many issues we face today on the family farm — worked by me, my son, my brother-in-law and my son-in-law — are no less challenging than they were when I began. In most careers, things get easier as you move along. In farming, since the weather and prices are so unpredictable, it really never gets easier.

With few risk management tools available in the early days, it could take years to recover from a hailstorm, an early freeze or any of the many other natural perils that could be thrown at you. When I first learned of crop insurance, I didn’t purchase it because premiums were unaffordable and margins were too slim to afford it. Thankfully, Congress made crop insurance more available and affordable — by partially discounting the premium — and now I wouldn’t farm without it.

Since the passage of the 2014 Farm Bill, crop insurance is the best tool farmers have to manage risks and revenue. It’s not cheap, but it is something that we budget for annually and can’t imagine not having.

The key to crop insurance’s success has been its affordability, its availability and its viability. Last year, farmers spent nearly $4 billion on crop insurance policies that protected 90 percent of planted cropland in the United States. I’d bet that many of the farmers in our area wouldn’t be surviving the current drought — which started in 2011 — if it wasn’t for crop insurance.

Despite the fact that agriculture’s safety net programs took a huge cut in the last farm bill, some in Congress seem to think we need to give more. I wonder if some of those people have any idea where their food and clothes come from or what it takes to get it from the farm to their plate or closet.

It seems almost daily that someone in Congress is proposing a bill to cut the premium support on crop insurance. It would not serve anyone to cut these risk management tools to farmers, as they allow farmers to concentrate on producing higher-yielding, better-quality crops that reduce the costs to the consumer.

Crop insurance is not a gift but insurance, just like homeowner’s insurance, that farmers buy. And like homeowner’s insurance, we don’t collect a dime without a verifiable loss and paying a deductible. Without crop insurance, many farmers couldn’t get financed and it would be almost impossible for a beginning farmer to get started.

Crop insurance is critical in meeting these challenges, and guarantees the American consumer a safe, affordable supply of quality food and fiber that is unsurpassed anywhere in the world.

Kelly Horton lives in Hollis.

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