HEADLINES & MEDIA
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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…
There is a huge story playing out right before our very eyes this year in agriculture that nearly everyone is missing: Despite the fact that this nation has faced two of the worst farming years in decades – with devastating drought in the Southern Plains and flooding in the Midwest in 2011, and widespread drought over major corn and soybean growing regions in 2012 – there has not been a single call for an ad hoc disaster bill from America’s crop farmers.
And why no calls for disaster assistance from crop farmers? Because 86 percent of planted farmland in 2012 was protected by crop insurance, the best risk management tool available to farmers. Before crop insurance was widely available, natural disasters like we have just experienced would have triggered a very costly, unbudgeted ad hoc disaster bill. Forty-two such emergency disaster bills in agriculture have cost taxpayers $70 billion since 1989, according to the Congressional Research Service.
Crop insurance was designed by Congress to largely replace the need for ad hoc disaster legislation, thereby helping to shelter taxpayers from the full costs of agricultural disasters and avoiding the need to enact new disaster assistance following every major farm disaster, such as was recently experienced…
It would be nice to talk about the great drought of 2012 in the past tense, but unfortunately, the entire state of Missouri remains in drought.
But if Missouri’s farmers hadn’t purchased a crop insurance policy last year — as most do every year — they could have lost more than their crops. They could have lost their farms, or their life savings, which is why crop insurance has become the primary risk management tool for farmers across the country.
Crop insurance is a modern-hybrid risk management tool. It’s a public-private partnership whereby farmers purchase insurance — partially underwritten by the federal government — to cover crop losses. Policies are sold, serviced and delivered by the private sector, and when disaster strikes, the…
Corn, cotton, sorghum, spring wheat rates revised too
* USDA will phase in changes to cushion drought impact
* Agency expects little impact on 2013 planting decisions
WASHINGTON, Nov 28 (Reuters) – The U.S. government has ordered crop insurers to charge lower premiums to soybean growers for the second year in a row as part of rate revisions for six major crops, even as many farmers collect on claims following this year’s severe drought.
The changes are part of an Agriculture Department project to improve the actuarial soundness of the crop insurance program, which is federally subsidized but privately run.
Lenders often require insurance or other collateral to be pledged by farmers to assure repayment of farm operating loans. USDA pays 62 cents of each $1 in premiums, which totaled $11 billion this year.
USDA’s Risk Management Agency on Wednesday said that the revised rates are not expected to affect planting decisions among various crops in 2013.
The new rates will be phased in “to limit year-to-year premium changes and potential increases due to losses experienced in 2012 as a result of drought,” the agency said.
Indemnities for crop losses could hit a record $20 billion this year following the worst drought in half a century, analysts say, double the mark set in 2011. So far, $6.3 billion has been paid out on insurance policies.
Overall, premiums for soybeans will fall by 6 percent and for rice by 8 percent for 2013 crops while the premium for spring-planted wheat will rise by 4 percent.
Corn, cotton and grain sorghum premiums will decline in the core growing states for those crops but will rise in outlying states. The same pattern applies to soybeans,…
