Plowed Under ‐ Redux

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By Thomas P. Zacharias, President, National Crop Insurance Services

The Environmental Working Group’s (EWG) most recent report entitled Plowed Under (August 6, 2012) deserves a few candid observations. By all outward appearances, the document appears to be a standalone “research effort.”

As such, the report has no real analytical or science‐based foundation. The report attributes recent crop land use conversion rates to the existence of crop insurance. How is this substantiated? By way of a series of mapping overlays, EWG associates loss of wildlife habitat solely due to farmers’ use of crop insurance. There is no demonstration of any formal analysis, such as statistical or economic considerations. It is not obvious that the reportunderwent any form of peer‐review, nor is there is any reference in the report to any similar analysis that has been published in peerreviewed journals.

This is quite unfortunate and irresponsible. Fortunately, one does not have to search too far to find a series of peer‐reviewed studies on this very topic. I have provided such a review of the subject here.

So, what do we know…

In a paper presented at the 2011 Annual Meeting of the Agricultural and Applied Economics Association, authors Miao, Feng, and Hennessy (Iowa State University) find crop land use effects attributable to crop insurance to be quite small. Conversely, the authors find product price to be the more dominant factor in farmer’s land use decision. This is consistent with most published literature.

More recently in the August 2012 Journal of Agricultural and Resource Economics, authors Walters, Shumway, Chouinard, and Wandschneider find “…. small, but not universal, tendency for increased crop insurance participation to create “noticeable” environmental effects …evidence shows both positive and negative effects as cropping patterns change. On average, the contribution of crop insurance to adverse environmental effects is slightly less than 1%…” A careful reading of their paper also indicates that product price is the dominant factor in farmers’ acreage decisions, again consistent with the existing literature.

These are peer‐reviewed studies that are based on formal analytical and statistical techniques; not for the faintof heart. This should be the essence of the policy debate. The assertion by EWG that farmers are planting on less‐productive land simply and solely to collect insurance indemnities is unfounded.

Partial and incomplete analysis of important agricultural and environmental policy issues does not serve the public well, particularly in the midst of the Farm Bill debate and the current drought situation in the Midwest. Maybe farmers are praying for rain instead of drought, and maybe policy makers are praying for intellectual honesty instead of glib, one‐line headline seekers.Farmers are probably not laughing at ill‐informed critics,nor are they laughing at burned‐out corn and soybean fields.

Who can know the heart?

Despite Crop Insurance, Drought Still Stings Farmers

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Stop by most any unirrigated farm across the lower Midwest and you’ll see crops in distress. Midwestern corn and soybean farmers are taking a beating during the recent drought, but it’s not likely to drive many out of business.

Most of those farmers carry terrific insurance, and the worse the drought becomes, the more individual farmers will be paid for their lost crops. The federal government picks up most of the cost of the crop insurance program, and this year that bill is going to be a whopper.

 

Despite Crop Insurance, Drought Still Stings Farmers

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Stop by most any unirrigated farm across the lower Midwest and you’ll see crops in distress. Midwestern corn and soybean farmers are taking a beating during the recent drought, but it’s not likely to drive many out of business.

Most of those farmers carry terrific insurance, and the worse the drought becomes, the more individual farmers will be paid for their lost crops. The federal government picks up most of the cost of the crop insurance program, and this year that bill is going to be a whopper.

 

Crop Insurers Reassure Farmers as Drought Worsens

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OVERLAND PARK, KANSAS, July 18, 2012 – As the drought spreads and attention turns to worsening crop conditions in farm country, the nation’s crop insurers today reassured farmers that companies will have the money necessary to quickly pay out claims in 2012, even amid record payouts last year.

For every dollar of premium that insurance companies write, they have a regulatory requirement to have the private financial backing to cover catastrophic losses. Each year, the Federal Crop Insurance Corporation reviews and approves every company’s plan of operations to ensure that adequate capital is available, explained Tom Zacharias, president of National Crop Insurance Services (NCIS), the industry’s trade association.

“We’ve always been there for our farmer customers when they’ve faced tough times in the past and we’ll continue to be there,” he said.

Zacharias said 2011, which was marked by widespread weather-related loss and a record $11 billion in indemnity payments, should serve as a good model for what farmers can expect this year.

In 2011, most payments to farmers on the policies they purchased were processed within 30 days of claims being finalized. Such efficiency required a highly trained and skilled force of agents and claims adjusters, Zacharias pointed out.

There are about 5,000 certified crop insurance adjusters in the country who are already visiting farms and assessing damage. More than 2,000 of these adjusters are expected to attend NCIS sponsored training sessions this summer where part of the focus will be on this year’s droughts.

Although indemnity payments on the 2012 crop are already being made, NCIS is unable to predict the extent of likely damages this year because reliable information about the number of policies sold in 2012 and the acres covered by those policies will not be available until mid-August. Final indemnity estimates will take even longer to filter in.

In the meantime, Zacharias offered advice for farmers who are facing weather disaster. If producers think they have a loss on an insured crop, they must:

1. notify their crop insurance agent within 72 hours of the initial discovery of damage;

2. continue to care for the crop and protect it against further damage, if possible; and,

3. obtain consent from the insurance company prior to destroying any of the insured crop.

“Crop insurance is working well, and it will prove to be instrumental to agriculture’s ability to rebound this year,” Zacharias concluded. “As Congress debates a new Farm Bill and as the administration considers future changes, we hope they will see our impressive track record and do no harm to crop insurance.”

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Don’t Throw Specialty Crops Under the Bus

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It’s wonderful to extol the benefits of fresh fruits and vegetables, to urge them to be made more available in our schools and restaurant menus and to fight to better educate the public about the growing body of research that shows fruits and vegetables are critical to promoting good health.

But what about fighting for public policies that support the very farmers who grow fruits and vegetables? Specialty crop growers — those farmers who grow crops including apples, peaches and pears — are somewhat unique in agriculture in that they grow higher value, often perennial crops and are slightly more vulnerable than the average commodity farmer or rancher.

And while the last decade has seen a wide variety of farm policies that were devised to help the growers of the major commodities in times of weather calamites, one policy that has really worked for the specialty crop industry is crop insurance.

That’s why, as a crop insurance agent, it’s so distressing that the Senate passed an amendment to the farm bill that would subject crop insurance participation to a means test. The means test would essentially take insurance benefits away from many of the larger, well-established and highly profitable farmers and ranchers.

Convo 17

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Farmers all across the country have said they like crop insurance. They understand it, they pay premiums — probably not thrilled about that piece of it — but having said that, they’re willing to do it. They understand the protection comes at a price so they have to pay for it. I just think it’s going stay. I really believe that crop insurance and risk management is what this Farm Bill is all about.

Crop Insurance Means Drought, Not a Disaster

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A drought specialist with the national weather service recently compared the drought and heat wave here in the Midwest with the catastrophic dry period of 1988 that, at the time, cost agriculture $78 billion. This year’s weather pattern, which settled into the Great Plains and the Southwest last year and has spread into the Corn Belt, resembles those of a quarter century ago, he noted.

USDA Chief Economist Joe Glauber recently said that “49 percent of the corn crop, 50 percent of the soybean crop and 45 percent of the hay crop are all in areas that are experiencing drought,” adding that a lot of that area actually is in the “severe drought” category. For consumers, this drought could spell higher food prices as food and feed supplies tighten further and global demand continues to rise.

For farmers and ranchers — who in 2011 experienced one of the most disastrous weather years in history — this could mean yet another year of dismal harvests and dashed hopes. Thankfully, the vast majority of U.S. farmers purchase crop insurance policies, which last year covered 84 percent of eligible lands, protecting 266 million acres of crops.

 

Crop Insurers Comment on Senate Farm Bill

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The following statement regarding the Senate’s Farm Bill passage should be attributed to the American Association of Crop Insurers and the Crop Insurance and Reinsurance Bureau.

“The approval of bipartisan legislation is no small feat in today’s political environment, and Chairwoman Debbie Stabenow (D-MI) and Ranking Member Pat Roberts (R-KS) should be applauded for crafting a bill able to pass by such a wide margin.

“While the bill that came out of the Senate is not perfect, it is a very important step in the process and it puts crop insurance on strong footing for the future.

“Farmers from across the country, agribusinesses, and the nation’s lending community sent a unified message to Congress this year: Do no harm to crop insurance. We will work hard as the Farm Bill moves to the U.S. House of Representatives to ensure that the final Farm Bill package meets that simple test.

“Crop insurance helped agriculture survive one of the worst weather years on record in 2011, eliminating the need for expensive, off-budget bailouts. As crop insurance takes a more prominent role in risk management strategies for farmers and ranchers, Congress should look for ways to strengthen crop insurance, not weaken it. Saddled with new regulatory burdens, $12 billion in funding reductions since 2008, and historic indemnity payouts, the crop insurance system is already strained and cannot absorb additional attacks.”

 

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Congress Looks to Take Another Bite Out of Farmer’s Crop Insurance

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It’s not uncommon for a bank to ask for proof of insurance prior to lending you money. If the car, boat, or home for which you are seeking financing is destroyed, the bank needs some peace of mind that insurance will be there to cover the loss of its investment.

Agricultural loans are no different—except those loans are much larger than the ones most of us take out. And the risks that farm borrowers – particularly small farm borrowers – face every day are much greater than those facing everyday citizens.

Crop insurance has been the best tool to mitigate this extreme risk, which ranges from Mother Nature, to volatile markets, and heavily subsidized foreign competitors.

Better risk management also made it possible to obtain essential capital during the down economy, and the relationship has paid big dividends for rural economies.

The Federal Reserve of Kansas City noted, “In 2010, rural America was at the forefront of the economic recovery.”

But that success story is under attack right now in Washington, as lawmakers target crop insurance for yet another round of funding cuts and new regulatory burdens. The most serious threat comes from an amendment to subject crop insurance participation to a means test.

In other words, insurance benefits would be stripped away from larger, well-established farms and ranches. It seems innocent enough. After all, no taxpayer likes the idea of government dollars being spent on wealthy people when so many others are struggling.

But this amendment holds serious unintended consequences and could wind up harming not only small farmers, but farmers and ranchers of all sizes and income brackets, right along with the local economies they keep afloat.

Think of it this way. If you removed all the safe drivers from the auto insurance pool, or all the homeowners outside of floodplains, house and car insurance wouldn’t be affordable for anyone. That’s because insurance companies have to spread risk and delivery cost out across a diversified customer base to make products more available for all. For every risky policy, you need one with little risk.

If the amendment passes, the farmers left in the insurance pool will have to fork over more for premiums, and even then, their quality and speed of service will likely diminish as insurers wrestle with shrinking profit margins or losses.

Some will argue that the government shouldn’t be involved in crop insurance at all. That’s not realistic.

That would leave America in the same position it was in before we had a vibrant crop insurance system, when costly ad hoc disaster bills came before Congress nearly every year and taxpayers—not private insurers—bore all the risk.

For this reason, the country’s major financial institutions are urging Senators to vote no on all crop insurance amendments that would harm the crop insurance infrastructure.

Damaging the effectiveness and affordability of what’s left of Iowa farmers’ safety net and their most important risk management tool would only worsen the economy as a whole.

Alan Rosendahl is a Senior Vice President at Iowa State Bank and a farmer who resides in Kesley, Iowa.

This op-ed appeared in Agri-News on June 28, 2012

Congress Looks to Take Another Bite Out of Farmer’s Crop Insurance

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It’s not uncommon for a bank to ask for proof of insurance prior to lending you money. If the car, boat, or home for which you are seeking financing is destroyed, the bank needs some peace of mind that insurance will be there to cover the loss of its investment.

Agricultural loans are no different—except those loans are much larger than the ones most of us take out. And the risks that farm borrowers – particularly small farm borrowers – face every day are much greater than those facing everyday citizens.

Crop insurance has been the best tool to mitigate this extreme risk, which ranges from Mother Nature, to volatile markets, and heavily subsidized foreign competitors.

Better risk management also made it possible to obtain essential capital during the down economy, and the relationship has paid big dividends for rural economies.

The Federal Reserve of Kansas City noted, “In 2010, rural America was at the forefront of the economic recovery.”

But that success story is under attack right now in Washington, as lawmakers target crop insurance for yet another round of funding cuts and new regulatory burdens. The most serious threat comes from an amendment to subject crop insurance participation to a means test.

In other words, insurance benefits would be stripped away from larger, well-established farms and ranches. It seems innocent enough. After all, no taxpayer likes the idea of government dollars being spent on wealthy people when so many others are struggling.

But this amendment holds serious unintended consequences and could wind up harming not only small farmers, but farmers and ranchers of all sizes and income brackets, right along with the local economies they keep afloat.

Think of it this way. If you removed all the safe drivers from the auto insurance pool, or all the homeowners outside of floodplains, house and car insurance wouldn’t be affordable for anyone. That’s because insurance companies have to spread risk and delivery cost out across a diversified customer base to make products more available for all. For every risky policy, you need one with little risk.

If the amendment passes, the farmers left in the insurance pool will have to fork over more for premiums, and even then, their quality and speed of service will likely diminish as insurers wrestle with shrinking profit margins or losses.

Some will argue that the government shouldn’t be involved in crop insurance at all. That’s not realistic.

That would leave America in the same position it was in before we had a vibrant crop insurance system, when costly ad hoc disaster bills came before Congress nearly every year and taxpayers—not private insurers—bore all the risk.

For this reason, the country’s major financial institutions are urging Senators to vote no on all crop insurance amendments that would harm the crop insurance infrastructure.

Damaging the effectiveness and affordability of what’s left of Iowa farmers’ safety net and their most important risk management tool would only worsen the economy as a whole.

Alan Rosendahl is a Senior Vice President at Iowa State Bank and a farmer who resides in Kesley, Iowa.

This op-ed appeared in Agri-News on June 28, 2012

Convo 16

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Sorghum producers across the Sorghum Belt faced significant challenges last growing season as a result of the drought. NSP supports Federal Crop Insurance, which is providing meaningful risk management tools to our producers.

Convo 16

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Sorghum producers across the Sorghum Belt faced significant challenges last growing season as a result of the drought. NSP supports Federal Crop Insurance, which is providing meaningful risk management tools to our producers.

Gutting of crop insurance in farm bill threatens farmers’ survival

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Quentin Bowen of Humboldt, Neb., is a farmer who raises corn and soybeans.

As I spend these hot summer days tending to my drought-stressed and dying corn and soybean crops, I am glad I purchased crop insurance.

Whether it’s a flood instantly washing your livelihood down a newly formed river channel, or the blistering sun overcooking your hopes one day at a time, there’s nothing worse than losing a crop and a whole year’s work.

Then again, there’s nothing better than rejoicing in a bountiful harvest, which wouldn’t even have been an option for most growers had crop insurance not helped them pick up the pieces following a disastrous 2011.

Future bumper crops may not be an option for many if some senators are successful in gutting the pending farm bill. That’s because more than a dozen farm bill amendments have been introduced to render private-sector-run crop insurance — our most effective risk management tool — ineffective.

Some amendments would take more money from a program that has already seen $12 billion in funding reductions since 2008, leaving it stressed to a breaking point. Other amendments would cap the discounts farmers get on insurance premiums to make policies obtainable, effectively leaving many mid-size farms and specialty crops without adequate protection from disaster.

The biggest threat comes from a proposal to limit participation in crop insurance through an arbitrary means test, based on your tax filings with…

 

Crop School Teaches Insurance Adjusters To Assess Hail Damage

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COLUMBIA — Gene Painter kneels and observes the sample of wheat before him, explaining the difference between damage done by hail and other perils. A clean cut in the stalk signals a rodent; a bent stalk is wind damage; but a broken stalk or missing berries are signs that hail is to blame.

Once determining that hail is the culprit, Painter, a claims supervisor with American Farm Bureau Insurance, refers to the calculations that are used to determine the stage of growth the plants were in when they were damaged. The earlier the damage occurred, the higher the expected loss. These tools serve as a guide to assessing hail claims.

“The way things were done in the old days, every adjuster had his own method and we had to get away from that,” he said. “We need to base it on real facts.”.

Painter is one of 18 plot leaders instructing 85 crop insurance adjusters at the National Crop Insurance Service Crop-Hail Wheat & Corn School.

The school was held Tuesday and Wednesday at MU’s Bradford Research & Extension Center. Bradford has been home to the annual school for over 20 years.

Crop School Teaches Insurance Adjusters To Assess Hail Damage

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COLUMBIA — Gene Painter kneels and observes the sample of wheat before him, explaining the difference between damage done by hail and other perils. A clean cut in the stalk signals a rodent; a bent stalk is wind damage; but a broken stalk or missing berries are signs that hail is to blame.

Once determining that hail is the culprit, Painter, a claims supervisor with American Farm Bureau Insurance, refers to the calculations that are used to determine the stage of growth the plants were in when they were damaged. The earlier the damage occurred, the higher the expected loss. These tools serve as a guide to assessing hail claims.

“The way things were done in the old days, every adjuster had his own method and we had to get away from that,” he said. “We need to base it on real facts.”.

Painter is one of 18 plot leaders instructing 85 crop insurance adjusters at the National Crop Insurance Service Crop-Hail Wheat & Corn School.

The school was held Tuesday and Wednesday at MU’s Bradford Research & Extension Center. Bradford has been home to the annual school for over 20 years.

Crop Insurance: No Good Deed Goes Unpunished

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When the levees broke and the floodwaters came rushing toward many Midwest towns, government officials asked me to make an enormous sacrifice.

They needed soil from my farmland to extend and build up a levee to hold back an unprecedented wall of water. If I said yes, it would save millions of dollars for businesses, homes and possibly lives in Hamburg, Iowa. But saying yes also meant centuries of fertile soil would be removed from my farm, essentially ruining everything my family had worked for and guaranteeing I’d have to start over.

Sacrificing my farm was an easy decision. It was the right thing to do. And after a long conversation with my crop insurance agent, I knew that I’d at least have a chance to pick up the pieces when the waters receded.

Stepping up is nothing new for agriculture. With a rising tide of debt caused by runaway spending flooding our country, agriculture offered up cuts to its policies to help get the country back on track.

All told, more than $15 billion in spending was sacrificed, and ironically, more than $12 billion of that came from the crop insurance system that is in place to guard against things like floods. Crop insurance, which is purchased by individual farmers with some backing from the government and is serviced by efficient private companies, has become our most important risk management tool.

But like the old saying goes: No good deed goes unpunished. Despite being one of the only industries to answer the budget bell for the country’s betterment, farmers are again in cutters’ sights…..

About the author: Michael Woltemath is a fourth-generation grower who has actively farmed for 16 years and owns a farm adjacent to the Hamburg levee in Iowa.

Don’t Hurt the Farmers That Feed Us

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It’s one of the great ironies of our time that the richest nation on earth, with the most productive agriculture sector the world has ever seen, would have so many citizens who live with food insecurity, the fear of not knowing where theirnext meal is coming from. The fact that many of these citizens are children makes it even worse.

Senator Kirsten Gillibrand (D-NY) has been a great advocate for the needy and for healthy eating, and it shouldn’t be a surprise to anyone that she’s doing everything she can to ensure that federal support for food stamp benefits are fully funded. Unfortunately, to pay for her recent amendment, she’s cutting the only viable risk management tool available to the very New York farmers who grow healthy food for the poor: crop insurance.

Crop insurance is a private-public partnership that has worked miracles in serving as a backstop to farmers and ranchers after disaster strikes, as it did last year here at home. Farmers purchase crop insurance, which is partially underwritten by federal government, so that when Mother Nature serves up a nasty surprise, there is something in place to ensure that come next year, farmers will be able to plant yet again and feed America.

2011 was a tough year for many of our areas farmers. Tropical Storm Irene hit right as farmers were harvesting their crops, wiping out an entire year’s work for many as their fields were swallowed under several feet of water. New York farmers growing apples, corn, grapes, peas and peaches, as well as many other crops, suffered enormous losses and thankfully collected nearly $45 million in indemnity payments from their private crop insurance policies.

And 2012 has already presented its challenges to our local farmers, as many in the Hudson Valley and the western part of the state lost some or their entire apple and other fruit crops to a late spring freeze. Thankfully, again, crop insurance was there to keep them from losing their farms. In fact, for those who argue that Americans, especially the disadvantaged, need to have access to fresh fruit and vegetables, crop insurance is the only viable safety net available to farmers who grow that produce.

Mike Southcott is a crop insurance agent based in Albion, New York.

Don’t Hurt the Farmers That Feed Us

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It’s one of the great ironies of our time that the richest nation on earth, with the most productive agriculture sector the world has ever seen, would have so many citizens who live with food insecurity, the fear of not knowing where theirnext meal is coming from. The fact that many of these citizens are children makes it even worse.

Senator Kirsten Gillibrand (D-NY) has been a great advocate for the needy and for healthy eating, and it shouldn’t be a surprise to anyone that she’s doing everything she can to ensure that federal support for food stamp benefits are fully funded. Unfortunately, to pay for her recent amendment, she’s cutting the only viable risk management tool available to the very New York farmers who grow healthy food for the poor: crop insurance.

Crop insurance is a private-public partnership that has worked miracles in serving as a backstop to farmers and ranchers after disaster strikes, as it did last year here at home. Farmers purchase crop insurance, which is partially underwritten by federal government, so that when Mother Nature serves up a nasty surprise, there is something in place to ensure that come next year, farmers will be able to plant yet again and feed America.

2011 was a tough year for many of our areas farmers. Tropical Storm Irene hit right as farmers were harvesting their crops, wiping out an entire year’s work for many as their fields were swallowed under several feet of water. New York farmers growing apples, corn, grapes, peas and peaches, as well as many other crops, suffered enormous losses and thankfully collected nearly $45 million in indemnity payments from their private crop insurance policies.

And 2012 has already presented its challenges to our local farmers, as many in the Hudson Valley and the western part of the state lost some or their entire apple and other fruit crops to a late spring freeze. Thankfully, again, crop insurance was there to keep them from losing their farms. In fact, for those who argue that Americans, especially the disadvantaged, need to have access to fresh fruit and vegetables, crop insurance is the only viable safety net available to farmers who grow that produce.

Mike Southcott is a crop insurance agent based in Albion, New York.

Tropical Storm Irene Proved the Value of Crop Insurance

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One side benefit of the popular “eating local” movement is a growing recognition by urbanites and suburbanites alike to the importance of agriculture and the need to ensure that farmers are able to withstand the many challenges presented by Mother Nature. While farmers manage their many risks using a wide variety of tactics, there is one tool in most farmers’ risk management portfolio, which they consider indispensible. That tool is crop insurance.

The value of crop insurance to New England’s farmers was made crystal clear last year with the arrival of Hurricane Irene, who brought heavy winds and even heavier rains just as crops were nearing harvest. While 2011 saw record losses across the U.S. with freezes in Florida, drought in the Southwest and floods in the Midwest, it was farmers in Vermont who sustained the highest loss ratios in the country. As a crop insurance agent, I can attest that many of our farmers saw their entire crops devoured in one day as floodwaters, sometimes six feet high, swallowed their fields.

After the waters finally receded and the extent of the damage to their farms was assessed, it quickly became clear that Hurricane Irene’s wallop had the potential of being a “game changer” for many New England farmers. And the only thing that allowed many of them to return to their fields this spring and plant was crop insurance, instead of losing their farms in bankruptcy.

Crop insurance is a public private-partnership whereby a farmer buys a policy that protects his crops from adversity. Just like homeowner’s insurance or car insurance, crop insurance is personalized to match each farmer’s degree of exposure to losses, and comfort level with risk. It’s sold, monitored and delivered by the private sector, so farmers receive their indemnities quickly after catastrophe strikes.

But it wasn’t always like this. When I first became an agent in New England in 1984, probably only about ten percent of our farmers purchased crop insurance. One reason was that it was a relatively new risk management tool for farmers in New England, but the biggest reason was its cost. So every time a disaster hit, since crop insurance wasn’t in play, farmers would rely on federal disaster bills, which were expensive for taxpayers and painfully slow to deliver help – taking up to one or two years at times – for the farmers who lost everything.

In the mid 90s, the federal government, weary of disaster payments and looking for a better risk management tool, put forward funds to help partially underwrite crop insurance premiums. Today, most farmers in New England and elsewhere have purchased crop insurance policies, which last year covered 80 percent of eligible crops covering 263 million acres.

Crop insurance is also great for consumers because it makes purchasing locally produced food possible. Consumers nowadays are concerned about the origin of their food, the cultural practices used to produce it and its overall safety. Many of us believe that the best food in the world is local, because we know that the farmer down the road has produced a product that is not only delicious but also secure. Without some kind of policy protection in place for those farmers, “buying local” could be a thing of the past.

And in the tight credit markets we live in, crop insurance has proven to be an indispensible tool for farmers seeking lines of credit from banks. When I first started in the business, it was rare to see a lender who would ask about crop insurance. Nowadays it’s almost ubiquitous, particularly for farmers who raise expensive specialty crops, like potatoes and apples.

Crop insurance has already shouldered $12 billion in federal funding cuts in the name of balancing the budget. But if the government continues to bleed crop insurance, it will become either unaffordable for farmers to participate, incapable of meeting the challenges when a disaster strikes, or both.

When the next Farm Bill is written, Congress needs to remember that it should “do no harm” to crop insurance. From those of us who weathered Hurricane Irene and lived to plant another day, we can attest to the fact that a robust crop insurance policy is in the best interest of not only farmers, but consumers as well. The farmers down the road that grow the food for your family and mine need some common-sense protection against Mother Nature. Crop insurance fits the bill.

 

About the Author: Art Carroll owns the Arthur Carroll Crop Insurance Agency in Limerick, Maine, which insures farmers in all New England states and New York.

This guest column appeared in Valley News, a daily newspaper of the Upper Valley in New Hampshire and Vermont.

 

Convo 15

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Even though crop insurance is our fourth largest annual expense, we continue to purchase it—that’s just how important it is to us. We have been fortunate not to have filed a claim in the past ten years. It’s comforting to know however that if we had needed it, we would have had the resources available to pay our bills, keep our employees on staff, and continue with this business.

Convo 14

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What we would like to see is continued support of our crop insurance.  The reason crop insurance is there is to prevent you from setting up an appointment with the auctioneer.

Convo 14

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What we would like to see is continued support of our crop insurance.  The reason crop insurance is there is to prevent you from setting up an appointment with the auctioneer.

EWG Study A Reckless Attack on Farmers’ Best Risk Management Tool

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(OVERLAND PARK, Kan.) — “The Environmental Working Group has an unprecedented track record of promoting and funding misleading and flawed analysis, as well as mischaracterizing data to generate news headlines. Its latest attack on farmers’ most important risk management tool is no different. For example:

  • EWG seems to be criticizing government support of crop insurance. Yet, EWG fails to mention that it is promoting a plan on Capitol Hill to provide farmers with 100 percent subsidized crop insurance coverage administered by the government instead of efficient private insurers.
  • The same fruit and vegetable growers EWG supposedly champions are likely some of the largest crop insurance benefit recipients on its list of ‘offenders.’
  • EWG fails to account for the fact that these ‘subsidies’ are premium discounts that are accounting transactions that take place within the USDA. There are no government subsidy checks to farmers. Unless indemnities are paid to a farmer, there is no outlay on that famer’s policy. Even when there is a loss, taxpayer cost is minimized by government underwriting gains on other policies, which is why CBO estimates for crop insurance have historically been so much higher than actual costs.

“Only telling part of the story is nothing new for EWG when it comes to agriculture. Its controversial database of direct and counter cyclical payments quietly combines multiple years, and in many cases multiple farmers, to distort the facts. Ironically, many of the ‘rich and famous’ subsidy recipients EWG has used in the past to make news headlines about farm program payments receive only conservation subsidy payments that EWG supports.

“Crop insurance is extremely popular with lawmakers from both sides of the aisle, as well as with farmers, their lenders, and nearly everyone with a stake in rural America. That is because crop insurance gives producers a fighting chance after disaster strikes or markets collapse. After recent reductions in farm policies, it is the single most important risk management tool remaining for U.S. farmers and ranchers.

“One must question the motive of EWG. Is it to leave America’s farmers and ranchers without the ability to survive and successfully manage agricultural disasters?”

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EWG Study A Reckless Attack on Farmers’ Best Risk Management Tool

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(OVERLAND PARK, Kan.) — “The Environmental Working Group has an unprecedented track record of promoting and funding misleading and flawed analysis, as well as mischaracterizing data to generate news headlines. Its latest attack on farmers’ most important risk management tool is no different. For example:

  • EWG seems to be criticizing government support of crop insurance. Yet, EWG fails to mention that it is promoting a plan on Capitol Hill to provide farmers with 100 percent subsidized crop insurance coverage administered by the government instead of efficient private insurers.
  • The same fruit and vegetable growers EWG supposedly champions are likely some of the largest crop insurance benefit recipients on its list of ‘offenders.’
  • EWG fails to account for the fact that these ‘subsidies’ are premium discounts that are accounting transactions that take place within the USDA. There are no government subsidy checks to farmers. Unless indemnities are paid to a farmer, there is no outlay on that famer’s policy. Even when there is a loss, taxpayer cost is minimized by government underwriting gains on other policies, which is why CBO estimates for crop insurance have historically been so much higher than actual costs.

“Only telling part of the story is nothing new for EWG when it comes to agriculture. Its controversial database of direct and counter cyclical payments quietly combines multiple years, and in many cases multiple farmers, to distort the facts. Ironically, many of the ‘rich and famous’ subsidy recipients EWG has used in the past to make news headlines about farm program payments receive only conservation subsidy payments that EWG supports.

“Crop insurance is extremely popular with lawmakers from both sides of the aisle, as well as with farmers, their lenders, and nearly everyone with a stake in rural America. That is because crop insurance gives producers a fighting chance after disaster strikes or markets collapse. After recent reductions in farm policies, it is the single most important risk management tool remaining for U.S. farmers and ranchers.

“One must question the motive of EWG. Is it to leave America’s farmers and ranchers without the ability to survive and successfully manage agricultural disasters?”

 ###

 

Crop insurance helps state’s farmers see another spring

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Mississippi and farming are so intertwined that it is hard to imagine one without the other. Agriculture is not only our state’s No. 1 industry; it employs roughly one-third of our population, contributing $5.8 billion to the state’s economy. There are approximately 42,000 farms in the state covering 11 million acres, producing rice, cotton, soybeans and other commodities, and there is not a county in our state where farming doesn’t play a major role.

Agriculture in this state, and throughout the U.S., has been one of the bright spots that is helping the U.S. turn the economic corner. But the productivity of the American farm and the consumer benefits of the American food supply did not just happen in a vacuum. And hands down, farmers across the country will tell you that their most important risk management tool is crop insurance.

As a crop insurance agent who was on more than a few farms the day after Hurricane Katrina struck, I can tell you first-hand that crop insurance was a financial lifeline for many farmers…

William Cole is a crop insurance agent from Batesville, Mississippi.

Crop insurance helps state’s farmers see another spring

/in , /by

Mississippi and farming are so intertwined that it is hard to imagine one without the other. Agriculture is not only our state’s No. 1 industry; it employs roughly one-third of our population, contributing $5.8 billion to the state’s economy. There are approximately 42,000 farms in the state covering 11 million acres, producing rice, cotton, soybeans and other commodities, and there is not a county in our state where farming doesn’t play a major role.

Agriculture in this state, and throughout the U.S., has been one of the bright spots that is helping the U.S. turn the economic corner. But the productivity of the American farm and the consumer benefits of the American food supply did not just happen in a vacuum. And hands down, farmers across the country will tell you that their most important risk management tool is crop insurance.

As a crop insurance agent who was on more than a few farms the day after Hurricane Katrina struck, I can tell you first-hand that crop insurance was a financial lifeline for many farmers…

William Cole is a crop insurance agent from Batesville, Mississippi.

Convo 13

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“Even in these good times, our farmers, ranchers and growers need a strong safety net. That begins with a crop insurance program that protects 264 million acres on about 500,000 farms.”

NCIS Comments on Senate Agriculture Committee Farm Bill Passage

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The following statement should be attributed to Tom Zacharias, president, National Crop
Insurance Services.

“We commend the Senate Agriculture Committee for its commitment and
determination to write and pass a Farm Bill that saves taxpayers money and provides
confidence to farmers and their lenders as they make business decisions for upcoming
growing seasons. The fact that the Committee successfully reached a bipartisan
consensus in today’s political environment is proof that the Farm Bill is important to all
corners of this nation’s economy and its citizens, both rural and urban.

“The bill passed out of the Committee today responded to calls from growers of most
major crops by keeping crop insurance strong and ensuring that it will remain at the
forefront of modern‐day farm policy. We appreciate the Committee’s efforts to improve
the crop insurance title and limit the adverse impacts of other programs on crop
insurance. The fact that farmers are in the fields planting following a difficult 2011
growing season shows how well the current crop insurance system is working.

“We look forward to working closely with lawmakers to make sure the 2012 Farm Bill
provides a strong safety net for the men and women who produce the world’s best
food, feed, natural fiber, and fuel supply.”

Crop insurance is a public‐private partnership designed to reduce taxpayer risk exposure and
speed assistance to farmers after disaster strikes. Since 2008, private crop insurance companies
have paid out more than $28 billion to farmers to help them recover from losses and remain in
production. Over the same period crop insurance funding has been reduced by more than $12
billion, meaning crop insurers are doing more with less. Avoiding further cuts and maintaining a
strong crop insurance system has been hailed among agriculture’s top priorities for the 2012
Farm Bill.

###

Mr. Jarvis Garetson

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Quite frankly, without strong and effective crop insurance tools, Garetson Brothers farms could likely have been preparing for a farm sale this spring. Instead, we’re planning and preparing to plant.

Convo 11

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In response to whether private delivery of crop insurance should remain or if the government should assume that role, Dr. Mark Lange, President and CEO of the National Cotton Council said, “I think it’s clear that the delivery of insurance or revenue programs from the government has a very chilling effect for agricultural producers.

Convo 7

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Farmers like me need to have access to affordable risk management tools to better mitigate the impact of significant crop losses and sharp price declines. This is why the upcoming farm bill is so important. It is not about providing income to the less than 2% of the American population. It is about insuring that the same 2% can continue to provide affordable food for the other 98% of Americans who rely on them.

Convo 12

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As Congress continues work on the next farm bill, our organizations agree that an affordable crop insurance program is our No. 1 priority.

Convo 12

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As Congress continues work on the next farm bill, our organizations agree that an affordable crop insurance program is our No. 1 priority.

Keith Collins on Insurance Payments

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Crop insurance companies already have paid $9.1 Billion in indemnity payments to US farmers for 2011. That a new record, and actually the largest lost claims in the history of the program according to USDA’s Risk Management Agency, and only 81% of claims have been finalized.

Former USDA chief economist Keith Collins says during the past 4 years more than $27 billion in private backed crop insurance has been paid to farmers affected by market drops or natural disasters.

Keith Collins on Insurance Payments

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Crop insurance companies already have paid $9.1 Billion in indemnity payments to US farmers for 2011. That a new record, and actually the largest lost claims in the history of the program according to USDA’s Risk Management Agency, and only 81% of claims have been finalized.

Former USDA chief economist Keith Collins says during the past 4 years more than $27 billion in private backed crop insurance has been paid to farmers affected by market drops or natural disasters.

Convo 10

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So as we look at the next Farm Bill, we need effective risk management tools for farmers that are simple and easy to use. In my visits around Michigan, and in our field hearing here and at the one we did in Kansas, we heard over and over again that crop insurance is the foundation of the farm safety net.

Convo 10

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So as we look at the next Farm Bill, we need effective risk management tools for farmers that are simple and easy to use. In my visits around Michigan, and in our field hearing here and at the one we did in Kansas, we heard over and over again that crop insurance is the foundation of the farm safety net.

Convo 9

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The speed of delivery of crop insurance — because it’s administered by private-sector companies — makes it a different kind of animal. In fact, if a natural disaster strikes and I’m covered by a crop insurance policy, typically the payment comes to me in one or two weeks, not in one or two years. Because of that speed of delivery, I can quickly recover from the loss and replant the field, garnering myself some needed income for the year and putting some food on the tables for consumers.

Convo 9

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The speed of delivery of crop insurance — because it’s administered by private-sector companies — makes it a different kind of animal. In fact, if a natural disaster strikes and I’m covered by a crop insurance policy, typically the payment comes to me in one or two weeks, not in one or two years. Because of that speed of delivery, I can quickly recover from the loss and replant the field, garnering myself some needed income for the year and putting some food on the tables for consumers.

Convo 8

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Farmers like me need to have access to affordable risk management tools to better mitigate the impact of significant crop losses and sharp price declines. This is why the upcoming farm bill is so important. It is not about providing income to the less than 2% of the American population. It is about insuring that the same 2% can continue to provide affordable food for the other 98% of Americans who rely on them.

Ag Singled Out for Budget Cuts

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With the floodwaters rising and the nation’s attention focused on the looming Midwest destruction, government officials asked me to make an enormous sacrifice.

They needed my farmland to extend and build up a levee to hold back an unprecedented wall of water. If I said yes, it would save millions of dollars for businesses, homes and possibly lives in Hamburg, Iowa.

Sacrificing my farm was an easy decision. It was the right thing to do.

Stepping up is nothing new for agriculture. With a rising tide of debt caused by runaway spending flooding our country, agriculture stood alone in offering up cuts to its policies to help get the country back on track.

All told, more than $15 billion in spending was sacrificed. It came mostly from the crop insurance system that, ironically, is in place to guard against things like floods.

Farmers and ranchers didn’t whine about these cuts. Blessed with generally decent prices and production, we swallowed hard and accepted them, crossing our fingers that the bottom didn’t fall out of the farm economy.

But like the old saying goes: No good deed goes unpunished. Despite being one of the only industries to answer the budget bell for the country’s betterment, farmers are again in cutters’ sights.

This past week, President Barack Obama unveiled a plan to hack another $8 billion out of crop insurance, and even more out of other policies in place, to help provide stability to the men and women who deal with unforeseeable weather and market-related risks every day.

Author: Mike Woltemath, a fourth-generation farmer grower who owns a farm adjacent to the Hamburg levee in Iowa.

Convo 6

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We have heard again and again from producers that crop insurance is the best risk management tool available. In jeopardizing this program, the President turns a deaf ear to America’s farmers.

Convo 6

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We have heard again and again from producers that crop insurance is the best risk management tool available. In jeopardizing this program, the President turns a deaf ear to America’s farmers.

Everyone Wins with a Strong Crop Insurance Policy

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It’s no great surprise when a well-funded libertarian think tank full of Washington policy wonks pushes for the belief that the federal government should not be involved in crop insurance and other key farm policies.

But those of us in farming know better. All we need to do is to remember the recent floods, droughts and other natural disasters that, without some government help, would’ve left our towns, our jobs, our economy and our lives in ruin.

The simple fact is that everyone wins with a strong crop insurance policy. It’s good for farmers because we’re not faced with losing our farms every time a natural disaster occurs. But it’s also good for consumers, particularly those in urban areas who rely on others to grow all of their food.

And it’s good for developing countries, which depend on us to help feed their growing numbers. Crop insurance ensures stability and reliability in the food supply.

But don’t take my word for the effectiveness of crop insurance. It happens that just last week, the Senate Agriculture Committee called together farm groups, elected officials and bankers in Kansas to ask what agriculture policies they thought were the most important.

During testimony, the governor of Kansas, every farm leader and two local bankers all agreed that crop insurance is the most important farm policy now.

Kansas Gov. and former Sen. Sam Brownback, no big fan of big government, said, “crop insurance is an important risk management tool to producers.” A spokesman for the Kansas Soybean Association called crop insurance “a vital part of the farm income safety net for soybean farmers.” His colleague with the Kansas Cotton Association agreed, calling crop insurance “an essential risk management tool for cotton producers.”

Karl Esping with the Kansas Sunflower Commission said that growers need crop insurance to manage their risky business. “As you look at priorities in this new farm bill, please consider that producers still need a safety net for crop failure and disaster. Crop insurance has been and still is the best tool for these situations.

“Full funding for the crop insurance program is the highest priority for sunflower growers, and I suspect that it is the case for all commodities.”

In fact, when all was said and done, groups representing corn, wheat, cotton, sunflowers and sorghum all sang the praises of crop insurance. But it didn’t stop there.

The director of High Plains Farm Credit promised to “continue to work hard to ensure that our customers and others have access to the crop insurance policies they need to protect their investment in their crop and farming operations.” The CEO and chairman of Western State Bank discussed the various proposed cuts in farm policies and urged members of the Senate to make sure that federal monies are spent on efficient and effective policies.

“I think the most efficient program is the crop insurance program,” he said.

While these testimonials come from a hearing in Kansas, the script would have been identical if the hearing was held in Minnesota, North Dakota or any other big agricultural state.

What most libertarians don’t like to admit is that crop insurance is a great example of a public-private partnership that combines the strengths of both sectors and increases the amount of good done by a modest government investment.

For skeptics who thought that the flexibility and efficiency of the free market could never be combined with the universality and affordability of the public sector, this policy proves them wrong. Crop insurance was bought for more than 80 percent of America’s principal crop acreage, with 256 million acres under policies worth $80 billion in total coverage.

There’s no denying that agriculture’s support for crop insurance is strong and deep. That might not be a tune libertarians want to hear, but it’s music nevertheless.

Author: Greg Schwarz, President, Minnesota Corn Growers Association

This op-ed first appeared in the Grand Forks Herald on September 20, 2011

Everyone Wins with a Strong Crop Insurance Policy

/in , /by

It’s no great surprise when a well-funded libertarian think tank full of Washington policy wonks pushes for the belief that the federal government should not be involved in crop insurance and other key farm policies.

But those of us in farming know better. All we need to do is to remember the recent floods, droughts and other natural disasters that, without some government help, would’ve left our towns, our jobs, our economy and our lives in ruin.

The simple fact is that everyone wins with a strong crop insurance policy. It’s good for farmers because we’re not faced with losing our farms every time a natural disaster occurs. But it’s also good for consumers, particularly those in urban areas who rely on others to grow all of their food.

And it’s good for developing countries, which depend on us to help feed their growing numbers. Crop insurance ensures stability and reliability in the food supply.

But don’t take my word for the effectiveness of crop insurance. It happens that just last week, the Senate Agriculture Committee called together farm groups, elected officials and bankers in Kansas to ask what agriculture policies they thought were the most important.

During testimony, the governor of Kansas, every farm leader and two local bankers all agreed that crop insurance is the most important farm policy now.

Kansas Gov. and former Sen. Sam Brownback, no big fan of big government, said, “crop insurance is an important risk management tool to producers.” A spokesman for the Kansas Soybean Association called crop insurance “a vital part of the farm income safety net for soybean farmers.” His colleague with the Kansas Cotton Association agreed, calling crop insurance “an essential risk management tool for cotton producers.”

Karl Esping with the Kansas Sunflower Commission said that growers need crop insurance to manage their risky business. “As you look at priorities in this new farm bill, please consider that producers still need a safety net for crop failure and disaster. Crop insurance has been and still is the best tool for these situations.

“Full funding for the crop insurance program is the highest priority for sunflower growers, and I suspect that it is the case for all commodities.”

In fact, when all was said and done, groups representing corn, wheat, cotton, sunflowers and sorghum all sang the praises of crop insurance. But it didn’t stop there.

The director of High Plains Farm Credit promised to “continue to work hard to ensure that our customers and others have access to the crop insurance policies they need to protect their investment in their crop and farming operations.” The CEO and chairman of Western State Bank discussed the various proposed cuts in farm policies and urged members of the Senate to make sure that federal monies are spent on efficient and effective policies.

“I think the most efficient program is the crop insurance program,” he said.

While these testimonials come from a hearing in Kansas, the script would have been identical if the hearing was held in Minnesota, North Dakota or any other big agricultural state.

What most libertarians don’t like to admit is that crop insurance is a great example of a public-private partnership that combines the strengths of both sectors and increases the amount of good done by a modest government investment.

For skeptics who thought that the flexibility and efficiency of the free market could never be combined with the universality and affordability of the public sector, this policy proves them wrong. Crop insurance was bought for more than 80 percent of America’s principal crop acreage, with 256 million acres under policies worth $80 billion in total coverage.

There’s no denying that agriculture’s support for crop insurance is strong and deep. That might not be a tune libertarians want to hear, but it’s music nevertheless.

Author: Greg Schwarz, President, Minnesota Corn Growers Association

This op-ed first appeared in the Grand Forks Herald on September 20, 2011

Convo 5

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I know many farmers are probably eager to hear the department’s comments regarding crop insurance. Most farmers tell me crop insurance is crucial to their operations…

Matt Huie – A Personal Face On The Farming Crisis

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My grandparents’ children left the farm in pursuit of city jobs, but I loved everything about that life. So when I got the opportunity to move in with my grandparents at age 16, I didn’t hesitate.

After college, I made the decision to become a full-time farmer. Today, I live on a ranch about a mile from my grandfather—who is still operating part of his cattle ranch at 89—and hope to be able to one day pass on the skills that he passed on to me.

But many farm families are unable to compete with the lure of the city and are finding it harder to locate that member of the next generation willing and able to bear the torch. Without a new generation of farmers stepping forward, the world’s food supply, and Texas’ economy, will be challenged.

The average age of farmers in America is 58, the oldest at any time in our country’s history. Assuming most Americans retire at 65, that puts us about seven years away from real problems unless more young people shun lucrative desk jobs for riskier, and often lower paying, jobs on farms and ranches.

It sounds scary, and it is. But the idea of investing a future in farming is equally as scary for most young people. The expense of raising crops and cattle, the high risks faced every day, and the low returns on investment, is enough to make anyone run in the other, more secure direction.

Convo 4

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Now I understand that when Congress starts trimming the budget, everyone is going to argue that their specific program deserves protection. While I can’t speak for other aspects of federal spending, I can attest to the fact that crop insurance and other aspects of farm policy work for me. Without a doubt, they are the policies that keep family farms like mine in business and our nation food secure.

Convo 4

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Now I understand that when Congress starts trimming the budget, everyone is going to argue that their specific program deserves protection. While I can’t speak for other aspects of federal spending, I can attest to the fact that crop insurance and other aspects of farm policy work for me. Without a doubt, they are the policies that keep family farms like mine in business and our nation food secure.

Convo 3

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Most farmers now see [crop insurance] as a primary tool for risk management. An important tool for risk management.