HEADLINES & MEDIA
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,…
It’s no big secret that Missouri is facing its worst drought in 30 years. This has had a catastrophic effect on the state’s farm and livestock sector, prompting Secretary of Agriculture Tom Vilsack to declare every county in the state a disaster area in July. And while tropical storm Isaac brought us some much-needed rain, every county in the state remains in some level of drought.
As a Missouri farmer, I can tell you that there are few disappointments in life bigger than losing a crop. The loss not only robs you of income but also robs you of the joy of the harvest, which is what we farmers are all about.
If I hadn’t purchased a crop insurance policy this year to help me through an event like this, I possibly wouldn’t be able to farm again next year. But that’s the main reason why the federal government teamed up with the private sector years ago to form this public-
As Illinois farmers, our biggest concerns regarding the whims of Mother Nature are late spring freezes, heavy spring rains that delay planting, wind, hail, and possibly flood damage.
But this year, we’re in a whole other ballgame. We live in a part of the state that is affectionately known as “Little Egypt,” which could be quite appropriate given the fact that our climate seems more like the Sahara Dessert than the Midwest.
The entire state finds itself in a drought, with all but five counties in a state of “severe, extreme or exceptional” drought. To put that in perspective, a good part of our state is a foot or more below average on rainfall this year. And about 66 percent of our entire corn crop is currently in poor or very poor condition.
It’s times like these that farmers who purchase crop insurance will be able to sleep at night. That’s because crop insurance was designed by Congress for years like this, as a tool to move some of the risk of America’s farm sector from the taxpayers to the private sector.
There are those who say that the grass is always greener on the other side of the fence. But the opposite can be true as well. Sometimes, it’s not until you look on the other side of the fence that you realize just how green your own grass is.
That’s certainly true this year. After good precipitation in the spring, weather in Eastern Montana has been on the dry side since July; but the drought is not yet as severe as that in the Midwest. Weather is top of mind every year, since I’m a farmer who worries every year when I plant 2,300 acres of durum wheat, peas, lentils, flax and canola.
Last year, it was so wet from spring rains that I couldn’t get all of my land seeded. This year, after a promising start, it has become too dry. Mother Nature can be unpredictable, and a few bad years in a row without a good risk management strategy in place could mean the end of your farming career. That’s why I’ve purchased crop insurance every year since I started farming in 2001.
Crop insurance is a public-private partnership that not only reduces taxpayer exposure to risk, but also saves them money. When disaster struck last year with floods in the Midwest, drought in the Southern Plains and hurricanes on the East Coast, farmers who lost everything didn’t send their representatives back to Washington asking for a big farm disaster bill…