Bangor Daily News
December 13, 2016

“Diversify, diversify, diversify.” This is the mantra of most financial advisors—a popular approach to protect investors in the face of volatile market swings.

The same strategy also has served agriculture—another unpredictable market-quite well.

Here in Maine, we have established one of the most diverse agriculture “portfolios” in the nation. Growing everything from potatoes to apples and plenty of things in between, our farmers contribute more than $825 million to our state’s economy every year.

It’s exciting to see the potential that this diversified approach holds for the future of farming.

But those in agriculture face challenges that are simply incomparable to other industries. Farmers certainly can’t control the weather, which is often unforgiving, and they also have no sway over markets or the moves of foreign competitors. So it is essential that we have a safety net that protects the small percentage of individuals we enlist to feed and clothe our nation.

Unfortunately, the kind of crop diversification in Maine has not always been reflected in farm policy discussions. Farm policies of the past often focused primarily on a few crops commonly grown in the South and Midwest, while leaving others, such as specialty crops like blueberries, for example, with little support.

That’s no longer the case thanks to improvements to crop insurance. Now, crop insurance is available for more than 130 commodities and has more than 62,000 county-crop programs. Premium support discounts are the same across commodities for each plan of insurance.

This has translated into more farmers from outside the traditional farm country purchasing risk protection. Here in Maine, for example, there has been a more than 20 percent increase in acres insured over the past decade, providing the state’s farmers nearly $30 million in additional protection, according to U.S. Department of Agriculture data. Overall, almost 90 percent of farm acres in the U.S. are covered by crop insurance.

For many farmers, crop insurance offers peace of mind. A crop insurance check will never come close to what a farmer will reap from a good harvest, but it does help them keep farming year after year. And for our beginning farmers, crop insurance is even more critical. It would be almost impossible to receive the needed credit from financial institutions without some assurance that beginning farmers would be able to pay it back if a natural disaster struck.

Taxpayers have benefited as well. Prior to the emergence of crop insurance as the top risk management tool for farmers, natural disasters regularly resulted in very expensive, unbudgeted ad hoc disaster bills from Congress. Now, when disaster strikes, farmers receive an indemnity check.

But just to be clear, crop insurance is not a handout—it’s far from it. To gain coverage, farmers have to put skin in the game. In fact, since 2000, farmers have spent $48 billion out of their own pockets to purchase crop insurance protection. They only collect an indemnity after they have suffered a verifiable loss and fallen below their guarantee.

It’s a win-win for both farmers and taxpayers, yet some farm policy critics would like to send us back to the days of unbudgeted, taxpayer-funded and after-the-fact disaster aid. Legislative proposals like those presented during the last Farm Bill negotiations to limit participation and cap insurance benefits to some farmers would disproportionately affect specialty crop growers and organic farmers whose crops tend to have higher values and therefore are more likely to have higher premiums for coverage. That’s a really bad idea, especially when you consider how important crop insurance is to allowing our producers to stay competitive with the rest of the world.

Crop insurance treats all farmers equally, regardless of operation, size, region, or crop. For Maine farmers, in particular, it is crucial that we protect this safety net that does not discriminate.

E.J. Dorsey is a crop insurance agent with United Insurance in Fort Fairfield. He has more than 22 years experience in the crop insurance field.

Many folks might not realize this, but the passage of the 2014 Farm Bill was a turning point in American history, from an agricultural perspective. Largely gone are the days of government support programs like direct payments. In their place, and at the center stage of farm risk management tools, is crop insurance.

I had a chance to learn the value of crop insurance first-hand when my cousin and I rented our first farm together in 2012. We’ve been farming with our family for many years, but felt it was time to expand out and grab some of our own. Of course, little did we know that the year we kicked off our farming careers would soon become the driest year in decades. We lost all of our dryland crops, roughly forty percent of our acres that year. Thankfully, we had purchased crop insurance.

Unlike days of old, crop insurance is not a federal handout. In fact, if farmers want to enjoy the protection provided by crop insurance, they must purchase it. And they do so willingly, spending roughly $4 billion per year out of their own back pockets on crop insurance premiums alone.

For most beginning farmers, crop insurance is nearly a necessity, since banks are hesitant to make loans to farmers who lack sufficient collateral. Crop insurance allows banks the opportunity to increase lending capabilities with the security of crop insurance. That’s because with a crop insurance policy in hand, banks feel more secure making those loans to farmers, since there’s a guarantee of revenue even if the crop fails.

Crop insurance is a public-private partnership whereby individual farmers like me can buy policies for insurance that is specifically tailored for our tolerance to risk and the profile of our farm. Crop insurance is affordable to farmers, thankfully, because the federal government provides a discount, ensuring that all farmers, young and old, big and small, can purchase policies if they choose to.

Farmers buy crop insurance for the same reason drivers purchase auto insurance: it offers some degree of stability in times of disaster. Crop insurance has become, in essence, the nation’s insurance policy for the food supply. When Mother Nature strikes and farmers lose their crops, those with crop insurance policies in hand can bounce back and plant again the next year.

Crop insurance has also removed some of the financial risk from taxpayers. Prior to the rise of modern day crop insurance, the wide-scale disaster that we experienced with the great drought of 2012 would have necessitated a very expensive, ad hoc disaster bill from Congress. Those bills are big and are fully funded by taxpayers.

And while anything is better than nothing when you literally lose the farm, those disaster funds usually took a year or more to arrive in the hands of farmers who needed them. In my case when I lost forty percent of my crop in 2012, a year would have been much too late.

Crop insurance, on the other hand, is administered by private insurance companies and the indemnity arrives in weeks or a month or two, not years later. The crop insurance policy I purchased not only allowed me and my cousin to pay back our production loan, but also meet our forward contracting obligations. And we were able to bounce back and plant the next year. That’s a smart public policy because it ensures food security for our nation.

Of course crop insurance has its critics, and their sights are squarely on crop insurance, since it’s really the only game in town. And that’s why it’s important for farmers to speak up and let their elected officials know how much they value this risk management tool.

Needless to say, if we hadn’t purchased crop insurance our first year of farming, my cousin and I would be spending years paying off that production loan. And without this valuable risk management tool available, I’d venture to say many more of America’s farmers would have been joining us.

Scott Reilly is a farmer and crop insurance agent who lives in Spalding, Nebraska. This op-ed appeared in the Albion News on February 3, 2016.

Pop quiz: Next to tourism, what Florida industry is the state’s largest employer?

The answer isn’t healthcare, transportation, technology or even government.  Agriculture is Florida’s second biggest job supplier, according to the University of Florida.

“Two million jobs can be traced to the state’s agriculture, natural resources and related food industries — and not just on our 47,500 farms.  Income from $142 billion in annual sales gets spent around the state to create jobs in restaurants, department stores and car dealerships, too,” Jack Payne of the University’s Institute of Food and Agricultural Sciences said during a recent media interview.

Despite their importance, farmers and all they support are at the mercy of a multitude of uncontrollable forces.

A year of hard work and investment can be wiped out in an instant by a late-season hurricane, an early frost or an unexpected outbreak of insects or plant disease.

And the ever-looming prospect of a changing climate could be “potentially catastrophic,” according to Payne, as it wreaks havoc on water supplies, soil conditions and land use.

So how do farmers gain some control over the uncontrollable and add stability to the region’s economy?

Crop insurance is key.

Farmers purchase protection from weather disasters and price volatility, while private-sector insurers underwrite policies, verify claims and speed assistance to farmers when it is needed most.

The government, in turn, helps discount premiums to promote farmer participation and shield taxpayers from unbudgeted disaster aid that would be necessary without the private-sector insurance structure.

Crop insurance was long viewed as a tool primarily used by corn, soybean and wheat farmers in the nation’s midsection.  But lately, specialty crop participation along the coasts is growing and insurance protection is available on more than 100 different crops nationwide.

More than $1.3 billion in annual insurance protection is being purchased for Florida orange trees alone with another half a billion for nursery crops.  And thank goodness farmers are purchasing these policies.

In the back-to-back disaster years of 2004 and 2005, for example, more than $400 million in indemnity checks flowed to farmers in the state to help them pick up the pieces following hurricanes.

More can be done, too, to make insurance even more attractive to Florida’s farming community and help growers buy higher coverage levels to shield against tomorrow’s disasters.

The 2014 Farm Bill took initial steps by strengthening insurance for organic growers and making it more accessible for beginning farmers.  Other provisions boosted protection for livestock producers and will help bring new insurance products to the marketplace.

From Feb. 8-11, leaders from the crop insurance industry, American agriculture and the federal government will be at the Hyatt Regency Coconut Point Resort in Bonita Springs to discuss risk protection in the 21^st century and what can be done to continually improve the system.

Among the key discussion points: Keeping crop insurance affordable for all farmers regardless of their size or planting choices; ensuring widespread availability of insurance across all states and numerous crops; and maintaining the viability of private-sector delivery, which is far more efficient and effective than a government-managed alternative.

It is a packed agenda, and as the cornerstone of today’s farm policy, crop insurers have a lot to discuss.  However, I fully expect us to do our part in supporting the other major Florida employer – tourism – while we are in town.

Tom Zacharias is president of National Crop Insurance Services, based in Overland Park, Kan.  The guest column appeared on February 6, 2015 in the Fort Meyers News-Press and is available

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 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 when the farmers takes a loss.

For many farmers, particularly the thousands who grow specialty crops, crop insurance is the only risk-management tool available. Most of the growers I know buy crop insurance every year, yet nine times out of 10 they don’t collect a dime.

It’s not cheap. In fact, some growers spend $100,000 on policies they seldom use. Those who say farmers are getting rich off crop insurance, do the math.

When there’s a natural disaster, losses can be steep. If a farmer loses his entire crop to disease or disaster, many could go under without a backup plan. That plan is crop insurance.

California’s citrus industry is a window into the national crop insurance program and how it works. It was first introduced after a devastating freeze in 1990. Initially, growers were hesitant to spend large sums for protection. But participation has grown over time as premiums dropped.

The growth of crop insurance is a testament to the market and the dedication and professionalism of those who service the plans.

But there are those in Washington who will take the failure to pass a four-year farm bill and use it as an opportunity to eviscerate crop insurance. Every day I speak to California farmers, who, like farmers elsewhere, are worried about what would happen if their only risk management tool is weakened or eliminated.

Their message is to “do no harm to crop insurance.” If Congress feels the need to revisit the program, it should only be to strengthen it and expand the number of crops it covers.

California agriculture generates more than $37 billion a year. Sixty percent of our farms are less than 50 acres, just one indicator of the growing number of specialty crop operations. California needs specialty crops, and specialty crops need insurance.

Jordan Roach is the CEO of Global Ag Insurance Services in Fresno, the only crop insurance provider headquartered in California.

This op-ed appeared in the Modesto Bee on February 8, 2013.