HEADLINES & MEDIA
By Andrew Bowman, Oneida, Illinois
Hearings have started in Washington on the next farm bill. I count myself as one of the many farmers who will stand together and urge Congress to “do no harm” to crop insurance, which has become the front line risk management tool for American farmers.
Crop insurance is a public-private partnership whereby farmers like myself put “skin in the game” by purchasing policies to manage the many risks we face in this line of work. It does not guarantee profits, nor does it ensure farmers cannot fail. It protects farmers against circumstances beyond their control but does not prevent poorly managed farms from going under. Essentially, it allows market forces to work. Farmers gladly purchase crop insurance, and last year spent $4.1 billion out of their own pockets to do so.
How well is crop insurance working? Last year, most of the Midwest sizzled under a heat wave and drought that cut harvests in half for some farmers and virtually destroyed entire…
The U.S. Senate Committee on Agriculture, Nutrition and Forestry today voted to approve the Agriculture Reform, Food and Jobs Act of 2012, a bipartisan Farm Bill authored by Committee Chairwoman Senator Debbie Stabenow and Ranking Member Senator Pat Roberts.
The bill reforms food and agricultural policy by eliminating direct payments and emphasizing the need to strengthen risk management tools for farmers, saving billions of dollars. Overall, the Agriculture Reform, Food and Jobs Act of 2012 will reduce the deficit by $23 billion dollars by eliminating unnecessary subsidies, consolidating programs to end duplication, and cracking down on food assistance abuse. These reforms allow for the strengthening of key initiatives that help farmers and small businesses reach new markets and create American jobs. The measure will now go to the full Senate for consideration.
“The Agriculture Reform, Food and Jobs Act of 2012 will save taxpayers billions of dollars while promising a safe and healthy national food supply. By eliminating duplication, and streamlining and consolidating programs, we were able to continue investing in initiatives that help farmers and small businesses create jobs. This bill proves that by working across party lines, we can save taxpayer money and create smart, cost-effective policies that lay the foundation for a stronger, more prosperous economy. I am proud that once again the Agriculture Committee was able to work together in a bipartisan way to complete major reforms that save money and grow our economy.”
Stabenow continued, “We now look forward to continuing to work with our colleagues in a bipartisan way to ensure we enact a Farm Bill this year before the current one expires. Agriculture supports 16 million jobs in our country, and it is absolutely critical to provide farmers the certainty they need to plan and grow by passing a Farm Bill this year.”
By Bill Bridgeforth
It is hard to talk about the state of Alabama without mentioning agriculture. Alabama boasts more than 48,000 farms, covering roughly 28 percent of the state.
But being a farmer in the Deep South – given our weather patterns – is like owning an unpredictable dog. One day it loves you, the next day, it bites you.
In farming, when that dog decides to bite you, it comes in the form of powerful thunderstorms, hurricanes or droughts. That’s why for every year of the last thirty-five years that I’ve farmed, I purchase crop insurance. In fact, I can’t even conceive of farming without crop insurance.
In the past, when large-scale natural disasters hit farmers, Congress was immediately pressured to pass expensive, ad hoc disaster bills that were completely paid for by the public. Such disaster bills, while appreciated by farmers, took up to a year or more to arrive. But farmers need money in hand quickly after disaster strikes, because they must start planning, and purchasing inputs, for the next season.
That’s the beauty of crop insurance. First of all, taxpayers aren’t stuck footing the whole bill if and when disaster strikes. Crop insurance is purchased by each individual farmer, tailored specifically to the crops grown, the land the farm sits on and the farmer’s tolerance for risk.
Crop insurance isn’t cheap by any stretch of the imagination. The policies I purchase cost several hundred thousand dollars a year. But I consider that just a cost of production, because if disaster strikes, I can expect my crop insurance indemnity in about a month or less, not the years it takes for federal help to arrive. Those months saved can mean the difference between success and failure in farming.
Farmers across the country spent $4.1 billion purchasing crop insurance policies in 2012. The policies purchased insured 271 million acres, or roughly 86 percent of all planted cropland in the U.S.
But farmers aren’t the only group that has come to love crop insurance. Bankers love it too. That’s because when farmers approach bankers for production loans, bankers regard a crop insurance policy as a form of collateral. Additionally, bankers know that a farmer who has paid his own money for a crop insurance policy is a farmer who has risk management in mind.
Of course like any other public policy, crop insurance has its enemies. Some of those groups used last year’s historic drought to not only criticize the availability of crop insurance, but to also attack the character of farmers like me, who purchase it. One group said that farmers were “praying for drought, not rain,” implying that farmers would get rich from their crop insurance policies.
I was one of those farmers who suffered from the drought last year and let me set the record straight: We do everything we can to have the highest production possible every year. We select a good variety of seed, purchase the best fertilizer and do everything we can to protect the crop. If there ever were any farmers trying to live off of crop insurance, they’re long gone. The cost of production is just too high.
But if America is going to continue to enjoy its plentiful and affordable food supply, the country must also focus on helping the next generation of farmers to gain their footing and learn the trade. To that end, I am a founding member and Chairman of the National Black Growers Council, which serves as a network for black men and women who are involved in agriculture. Our mission is to improve the viability and profitability of the black row crop farmers, and to develop black talent for the next generation of farmers.
To that next generation of farmers who is seeking my advice, one of the first things I’d tell them is to make sure crop insurance is a line item in your annual budget. Because all of the best farming practices in the world aren’t going to stop Mother Nature from raining on your parade, at least every now and then.
Bill Bridgeforth farms corn, cotton, soybeans and canola and lives in Tanner, Alabama.
By Bing Von Bergen
There is a lot of buzz in Washington again this year about the prospects of a farm bill. For those of us in agriculture, a five-year farm bill is one of the few things Congress can do to take some of the guesswork out of farming.
That’s because farming is an inherently risky venture, and Mother Nature never seems to run out of tricks to play on America’s farmers. Floods one year, droughts the next, followed by a year or two of great weather peppered with a tornado, a late-spring freeze, and then a crash in commodity prices just as your crop comes into harvest.
How in the world can one businessman plan for all of those possibilities? The simple answer is crop insurance.
Crop insurance is a nationwide program that enables farmers to purchase insurance to partially protect themselves from both weather-related and market-related disasters. I’ve been a wheat farmer for 34 years, and when I started farming, crop insurance was just a shell of what it is now. Back then, it was not widely available, was not purchased by many farmers, and was completely administered by the federal government.
Today’s crop insurance policy is a completely different animal. It’s partially underwritten by the federal government but sold and delivered by private sector insurance companies, ensuring efficient handling of claims and speedy…
Bing Von Bergen of Moccasin is president and acting CEO of the National Association of Wheat Growers
By Rep. Adrian Smith (R-Neb.)
Earlier this month, President Barack Obama released his budget even though it was due on Feb. 4. While the House and Senate have already passed 10-year budget resolutions and the president’s proposals have little chance of being enacted, it is a revealing look at his priorities and vision for America.
Of particular interest to Nebraskans is how the president’s proposals would affect agriculture, the backbone of our local economy.
For example, President Obama’s 2014 budget proposes cuts to the federal crop insurance program. While we need to reduce our deficit and debt, it is counterproductive to undermine producers who manage risk.
Without crop insurance, only those producers able to purchase their own insurance will be able to afford to farm. Further cuts to this program will discourage participation which could increase premiums for producers and raise the cost of food for consumers.
Given the success of crop insurance, and in light of last year’s severe drought, we should be working to strengthen this fiscally responsible public-private partnership – not cutting it.
While the president has proposed cuts to crop insurance, he maintains increased funding levels for the Supplemental Nutrition Assistance Program (SNAP), also known as “food stamps.” Over four years, spending on the food stamp program has more than doubled, increasing from $35 billion to around $80 billion.
This amount accounts for most of the nutrition title, which comprises approximately 80 percent of the cost of the Farm Bill. Even during times of nationwide economic growth, food stamp spending increased. It is not unreasonable to consider modest changes without hurting families in need.
SNAP and agriculture programs have been enacted together in the Farm Bill since the 1960s, and more recently food stamp funding has been one major sticking point holding up passage of a long-term Farm Bill. Maintaining the status quo on food stamps while gutting crop insurance only complicates Farm Bill passage.
The president’s budget also makes a major shift in how the U.S. provides food aid around the world through the Food for Peace program. The White House budget would reduce the amount of food purchased from American farmers and ranchers and spend more to buy it from foreign producers or give cash payments to foreign suppliers.
We face logistical challenges to getting food to those most in need, and those problems deserve thoughtful deliberation. This does not mean we should push taxpayer dollars to foreign suppliers at the expense of high quality American products and jobs.
Despite these and other frustrations, I am pleased the president proposes bringing negotiations on the Trans-Pacific Partnership toward a conclusion by the end of 2013 – an ambitious goal which could open markets to more American agriculture products. I hope the president continues to pursue avenues of new market growth.
As the budget process continues, Congress should prioritize the programs and policies which encourage growth. Agriculture remains a bright spot in an otherwise bleak national economy – we cannot afford to undermine it.
Right before our very eyes, the nation’s specialty crop capital has turned into the nation’s frozen food section, as the San Joaquin Valley suffered several consecutive nights of freezing temperatures. While the extent of the damage to some crops could take weeks to assess, one thing is clear: Some farmers will take a big loss.
Loss is common in agriculture, and there has been a lot of it lately, though most of it was not here in California. In 2011, we saw a a freeze in Florida that hit the citrus crop, then Midwestern droughts, floods in the South and even hurricanes. Last year started off looking like a banner year but morphed into the worst U.S. drought in decades. Much of the Midwest is still suffering.
Thankfully, most farmers are protected by crop insurance, a backstop for when the bottom falls out. Crop insurance helps farmers manage risk. It combines the public sector with the competitiveness of the private sector. Farmers buy policies that are partially underwritten by the government, but the private sector services the policies and pays off…