NCIS President Tom Zacharias took on opponents of farm policy during more than a dozen live interviews at the National Association of Farm Broadcasters Convention in mid-November.
“The opponents of farm policy have bad memories, bad metrics and misleading messages,” noted Zacharias, who was referring to the 11th hour budget deal cut in late October that would have crippled agriculture’s safety net. “This destructive proposal would have forced a new SRA renegotiation before the end of next year around an arbitrary rate-of-return target so low that it would have effectively ended private-sector delivery.”
Zacharias reminded radio hosts that the private sector delivery of crop insurance — which ensures farmers receive their indemnity check for verified losses in weeks not years — was one of the chief reasons why farmers have adopted crop insurance as their primary risk management tool.
“Farmers have embraced both the personalized risk management plans that they work out with the crop insurance agents and the speed at which help arrives after they experience a loss,” Zacharias added.
Zacharias explained that before the advent of the premium subsidy and private sector delivery; only about 30 percent of cropland was protected by crop insurance.
“Those who would cut crop insurance further would literally turn the clock backward by decades, removing private-sector delivery and driving down enrollment in the program,” he said. “Today, that number is easily more than 90 percent.”
Farmers are the engines that drive the rural economy, and when it became clear that the farm safety net was under attack, rural America rallied. Zacharias noted, “Farmers from across the country called on their congressional delegations demanding that the cuts be stopped. Commodity organizations pulled out all the stops to educate lawmakers about the need for effective and affordable risk management tools, while input providers and agricultural lenders also weighed in.”
When looking towards the opposing side, he explained that opponents of agriculture have purposely confused the public about gross revenue versus net profit to spread misinformation about crop insurers’ returns. But when the facts are laid out and terms are clearly defined, it is clear that business returns have fallen well short of the levels necessary to preserve private-sector delivery of crop insurance.
“The actual bottom line return for crop insurance companies has fallen well below other lines of insurance, with crop insurers are losing 1.4 percent under the 2011 SRA,” Zacharias explained.
Despite the misleading rhetoric, rural America rose to the occasion and fought hard for the crop insurance industry. “All of that effort paid off in the end, with farmers and their allies in rural America securing a promise from Senate and House leaders to restore the full funding of the program in the omnibus budget deal at the end of the year,” Zacharias concluded.
Although it made for many sleepless nights, the harmful proposals were neutralized – for the time being – by passage of the highway bill that will restore $3 billion worth of cuts to the nation’s crop insurance program.