Kenny Bounds feels strongly about crop insurance.
“For ag lenders, crop insurance is portfolio insurance,” says Bounds (56), the Government Affairs Officer for Mid Atlantic Farm Credit, which serves five states. Bounds has been in ag lending for his entire career and lives on Maryland’s Eastern Shore.
“I tell our producers that anyone who self-insures is rolling the dice and may well end up losing the gamble. It can take years to regain the net worth lost in one bad year and years of additional debt service to amortize the loss. Crop insurance protects cash flow, as well as net worth and keeps you credit worthy.”
Bounds not only tells his crop insurance story to producers, he also shares his feeling with state and federal legislators.
He makes the case, that unlike other forms of casualty insurance, like auto or home, the risks in agriculture cannot be spread over many small, widely dispersed events. In agriculture droughts, storms, and other risks are spread over huge regions of the country.
“Crop insurance marries the private interest of the farmer, who has to pay his or her share of the premium, with the national interest in preserving the critical mass necessary to sustain the infrastructure that gives us our ample, and affordable, food supply.”
He also points out that our nation’s economy benefits from the huge positive impact agricultural exports have on our balance of trade. “Crop insurance is good for agriculture, and it is also a pretty good deal for the taxpayers,” says Bounds.
“Crop insurance not only holds a risk management umbrella over producers, but also over rural communities. Rural businesses are affected by the financial well-being, and profitability, of agricultural producers. Businesses such as feed and seed dealers, farm equipment dealers, and automobile dealers… they are all protected by the crop insurance umbrella.”