With a third straight year of declining farm income and reports of agriculture credit conditions deteriorating, we are reminded why lawmakers put a safety net in place for farmers, and why that safety net must be affordable and widely available to all producers in the country.

A recent report from the Federal Reserve Bank of Kansas City, which revealed the results of an ag credit survey, noted, “agricultural producers continued to reduce capital and household spending as profit margins generally remained weak.” And, these strenuous conditions are expected to continue for the foreseeable future.

It’s a fact that Todd Van Hoose, the president and CEO of the Farm Credit Council, recently discussed in an editorial for Farm Policy Facts.

“There is a lot of pain in farm country right now and we are seeing a lot of farmers limiting or foregoing equipment purchases and recalibrating other expense controls to balance their operations against the new commodity price level,” Van Hoose explained.

Consequently, the problem is not isolated to farmers and ranchers. It extends to the entire rural economy and beyond. Randy Nelson, the president of CHS Capitol, LLC, the financing arm of a large farmer-owned cooperative, told members of the House Agriculture Committee earlier this year that, “this is a far-reaching problem that goes down Main Street in the rural communities.”

Recent headlines suggest as much with John Deere announcing in July that it would cut more than 100 jobs at its East Moline, Illinois plant. This was followed by an August announcement to lay off another 120 jobs in Waterloo, Iowa. The company said both decisions were made due to anticipated decreases in the sales of agricultural equipment.

These are uncertain times for our agricultural producers and rural Americans, and the last thing they need is to have risk management tools like crop insurance ripped out from under them as some special interest groups in Washington, D.C., are pushing to do.

Critics spread false information about the mechanics and cost of crop insurance and then propose gutting it altogether. Meanwhile, they fail to appreciate that crop insurance has been the one thing that farmers, ranchers, and their lenders can count on in lean times.

“The role that farm policy and crop insurance plays in enabling that production cannot be overlooked or dismissed,” concluded Van Hoose. “In order to maintain and support a healthy, vibrant, competitive, and innovative farm sector, we must continue to invest in it.”

Living through the drought of 2012 as an Illinois farmer gave me a whole new appreciation for risk management tools.  There are things that farmers can do to try and deal with the curve balls served up by Mother Nature and with the ups and downs of market swings, but many things – like a massive drought or a heat wave – are completely out of our control.

If this drought would have happened a decade before, it would have left many farmers completely devastated and on the verge of bankruptcy, with nowhere to turn but to Congress for an expensive, taxpayer-funded bailout package.   In fact, past disasters have cost taxpayers tens of billions of dollars since 1979.

What was different about the drought of 2012, which was the worst natural disaster to hit this state in my lifetime, is that the vast majority of the state’s farmers had purchased the best risk management tool around:  crop insurance.  In fact, farmers spent well over $4 billion out of their own back pockets in 2012 purchasing the protection and peace of mind of crop insurance, which meant when disaster struck, they had a backup plan in hand.

The recent Farm Bill took three long years to pass and cut $23 billion out of farm programs.   But for those who for whatever reason are always looking to criticize farm policy that still wasn’t enough.   Now they have their sights set again on crop insurance, and are pushing forth ideas to make it more expensive for farmers to purchase.

What these misguided groups and members of congress seem to miss is that the reason why crop insurance has become the best risk management tool for farmers is that it’s affordable and reliable.  In fact, 90 percent of planted cropland was protected by crop insurance in 2014.  It’s this level of protection – made possible by crop insurance’s affordability – that keeps expensive disaster bills from hitting taxpayers when Mother Nature strikes.

Unlike direct payments in the past, crop insurance is not a handout. In fact, when farmers purchase crop insurance, they receive a bill, not a check, and only receive a payment if they incur a loss, and only after paying a deductible Just like homeowners insurance, when farmers buy crop insurance, they do so hoping that they will never have to use it.  And many of them rarely do.  In fact, since 2000, farmers have paid out more than $38 billion purchasing the protection of crop insurance, and in most years, they don’t collect a dime.

If crop insurance becomes more costly, then farmers simply won’t be able to afford it, and they will have nowhere to turn but the Federal government when disaster strikes.  This is a lesson we learned over and over again before crop insurance became widely available and affordable.

Crop insurance works so well and has been embraced so readily by farmers across the country because it’s a public private partnership that combines the best of the public and private sectors.  Crop insurance premiums are partially discounted by the government to ensure affordability and the policies are sold and serviced by the private sector.  And when disaster strikes, an indemnity check arrives in weeks, not years.

Like any other public policy, crop insurance isn’t perfect, and I’m sure Congress will do some fine-tuning to the program in the next Farm Bill just like they did in this one.  But the most important thing to keep in mind is that farmers are not only enormous producers, they are enormous consumers as well.  And with crop insurance policies in hand, they can bounce back from natural disaster or huge market fluctuations and continue to be the engines that drive the economy of rural America.

Keith Mussman is president of the Kankakee County Farm Bureau.  This op-ed appeared in the Champaign News-Gazette on April 27, 2015.

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 with Hurricane Sandy.

Farmers rely on crop insurance, and they show their support by voting with their pocketbooks. In fact, since 2000, farmers have spent nearly $30 billion out of their own pockets to purchase crop insurance protection. Yes, crop insurance premiums are partially discounted by the federal government, but first and foremost, farmers must put skin in the game to gain coverage.

Farmers must suffer a verifiable loss to collect an indemnity. Contrary to allegations, most farmers purchase crop insurance and do not collect an indemnity. In fact, of the nearly 1.1 million policies purchased in 2012 – the worst drought we have faced in decades — less than half of the policies were indemnified. And that is in a really bad year.

When farmers who purchase crop insurance suffer a loss, they usually receive their indemnity checks within 30 days of finalizing the claim. By contrast, it took the federal government three months to pass the Hurricane Sandy relief bill, and it could take months more before those funds reach the victims.

Of course, it is easy to criticize insurance after a costly disaster, which is why opponents of crop insurance, like the Environmental Working Group (EWG), are jumping on the bandwagon right now. EWG is not only critical of farm policy, but farmers as well. In fact, this summer, EWG claimed that farmers were “praying for drought, not praying for rain,” a statement that makes no sense whatsoever and points to EWG’s lack of understanding of the farm community and rural economy.

In an unusual and catastrophic year like 2012, there will be heavy losses and all participants will feel the pinch. That is how all insurance works. In crop insurance, losses are shared by farmers, who pay premiums — $4.1 billion last year — and who have deductibles, thus shouldering a percentage of loss; private insurers when premiums do not offset losses, as was the case in 2012; and, the government, which acts as a reinsurer and provides premium support.

But losses by the federal government are buffered by underwriting gains that they make during the good years. That was the case from 2001-2010 when the government saw $3.99 billion in underwriting gains.

So while opponents of crop insurance criticize a policy that has been embraced by farmers, farm groups, bankers and politicians of all political stripes, it is noteworthy that critics have conveniently glossed over the fact that this policy ensures that taxpayers are never stuck with the whole tab, as they were in the era of ad hoc disaster assistance, and they can rest assured that the food production system is financially stable.

But two bad years in a row might actually turn into three. Unless the spring rains break this pattern, 2013 is starting off as an incredibly dry year for many farmers, with roughly 57 percent of the continental U.S. in some level of drought. Thankfully, most of those farmers will purchase crop insurance, a

smart, fiscally sound and reliable approach to risk management.

This op-ed appeared in The Hill’s Congress Blog on March 1, 2013. Tom Zacharias is president of National Crop Insurance Services in Overland Park, Kansas.

Eighty-six percent of all planted U.S. farmland – some 281 million acres – is protected by crop insurance this year, up 2 percent from 2011 and a nearly three-fold increase from the late 1990s when only about 30 percent of farmers purchased policies, according to data from USDA’s Risk Management Agency.

The growth in coverage has been fueled by a number of factors, including fewer federal risk management alternatives for farmers, many farmers’ desire to have increased control of their risk management choices, federally-funded premium subsidies for those who purchase policies, a wide array of policy options and the value banks place on crop insurance when making loans.

But many would argue that private sector crop insurance agents, who operate largely on commission for the policies they sell, should be included in that list as well. Ruth Gerdes, a farmer and crop insurance agent from Auburn, Nebraska, nearly lost the land that she and her husband were farming 28 years ago and decided that other farmers needed to learn more about the benefits of crop insurance to avoid a similar brush with foreclosure.

One of the undeniable factors behind the growth of crop insurance, according to Gerdes, is “a motivated workforce” of agents. “We all strive to provide a quality service,” she said, adding that in an industry where premiums are decided by the government, the only way agents can distinguish themselves is through superior customer service.

“We all work to know the products and markets and are willing to be called upon at all hours when disaster strikes,” she said. Gerdes explained that agents, who are often farmers, or have farmed themselves, take great pride in their work and want their customers – the farmers – to be happy with both the insurance products they purchase as well as the service the agents provide. “And of course, part of it also is because we want the producer’s business again the next year,” she added.

Gerdes argues that “this competitive business model is good for the farmer and good for the system,” which is evident by the ever-increasing number of new crop insurance products developed, which today protect 128 different crops.

In 2012, some 1.2 million crop insurance polices were sold, covering 128 different crops. While 84 percent of the polices sold covered corn (34 percent), soybeans (31 percent) and wheat (19 percent), policies were also written for specialty crops including cherries, almonds, cranberries and avocados.

Todd and Ty Williams grew up on their family’s farm near Gruver, Texas, a town of about 1,100 people in the panhandle region. Todd Williams says he’s been driving a tractor since he was about seven years old, so it was just the natural course of events that he and his brother Ty would end up on the farm together as adults.

The brothers have been farming together since 1984. Williams notes that the main driver behind his desire to farm is his love for the work and the land, “because the money certainly isn’t in there,” he says. But above all else, he adds “there’s no better place on earth to raise your kids.”

The Williams brothers farm about 1,800 acres of wheat, corn, cotton and milo. Todd says that when he looks back at 2011, he remembers a year of unbelievable extremes. “Some people were flooded out in other parts of the country while we couldn’t buy a drop of water to save our lives.”

But farming and risk go hand in hand, and that’s why Williams purchases a crop insurance policy every year. “Wheat farming is so risky that using forward contracting as your only risk management tool is nearly impossible,” he says. That’s because if Mother Nature strikes and a crop is forward contracted without crop insurance, a farmer can end up owing a huge sum of money to fulfill the contract, on top of not having anything to harvest to provide income for the rest of the year.

Williams says he learned that lesson the hard way. He explained that a few years ago, he had a bumper wheat crop that was ready to harvest, so he worked through the day and on into the night, harvesting as much wheat as he could. He finally quit around 10 pm, with lots of wheat left standing in the field but exhausted from the long day’s work. Later that night, a large hailstorm blew through, crushing the remaining wheat. “One day it was ready to harvest, the next morning there was nothing taller that two inches in the whole field,” he said.

“Playing futures is risky, but contracting your wheat is an even bigger risk,” he notes.

Texas is a state that is not unfamiliar with droughts, heat waves, tornadoes and other weather anomalies. And because of that kind of weather, many Texas farmers are prepared to lose some of their crop on most years; but never all of it.

The drought of 2011 was so widespread and so extreme that even irrigated crops could hardly be saved. “It was so hot and dry, our irrigation pumps just wouldn’t cut it and our crops dried up,” Williams said.

Williams explained that he and other farmers were pulling so much water out of the local aquifer that they had to continually lower their pumps to keep the water coming.

The Williams brothers were running five irrigation wells and still couldn’t keep up with the heat and the lack of rain. “The crops just withered despite the irrigation,” Williams noted. “It was 110-112 degrees, the wind was blowing and the rain was nowhere to be found.”

Average rainfall for that part of the Texas panhandle is usually about 18-20 inches annually. In 2011, they received less than six inches for the whole year. Williams explained that when all was said and done, they were able to save a tiny portion of their crop by focusing irrigation on certain areas, but for the most part, “almost the entire crop was lost.”

Luckily his crop insurance agent, who Williams describes as “a super guy,” had touched base with the brothers throughout the year and knew that some degree of loss was inevitable. After months of fighting the drought and watching their crops wither despite their efforts, the Williams brothers came to the difficult decision that their fields were simply lost.

“The loss of a crop is crushing, even when you have crop insurance, because the insurance doesn’t really make you whole, it only helps you to recover to a small degree,” said Williams. He explained that like other farmers, he always looks forward to harvest, because it not only means the infusion of money, it’s the accomplishment of a year’s work. “I’d much rather have a harvest than an indemnity check,” he said.

But when disaster strikes and you lose some – or all – of your crop, farmers hope that the indemnity payment from their crop insurance policy is quick to arrive. Williams said that for him, that has always been the case. “Usually, the indemnity arrives in a week to 10 days,” he noted.

“If we didn’t have federal crop insurance last year, I’d be working at Wal-Mart or somewhere else today,” Williams said. “There is not a chance in the world I’d be farming today.” Williams said that because of his crop insurance policy, he and his brother are back farming today, and although it’s a bit dry, it’s a huge improvement over last year.

“Without federal crop insurance we’d be toast.”

The weekly U.S. Drought Monitor map released August 14 held more bad news for the contiguous United States, with 62 percent remaining in some level of drought. And the expanse that is gripped by extreme or exceptional drought rose nearly two percent last week to 24 percent.

The center of the drought remains directly over the Corn Belt. With some stage of drought covering the entire states of Indiana, Illinois, Iowa, Missouri and Kansas, the drought is certainly taking its toll on the corn and soybean crops. According to the August 10 estimates from USDA – the first “in the field” estimates of the year – production numbers are down substantially from what was projected at the beginning of the planting season.

Despite the fact that this was the largest corn crop planted since 1937, production is projected to be down 13 percent, the lowest output since 2006. Corn yields are expected to average 123.4 bushels per acre, down nearly 24 bushels from last year, which would be the lowest average yield since 1995. Soybeans tell a similar story. Soybean production is forecast to be down by 12 percent from last year, and if realized, would have the lowest average yield since 2003.

“Thankfully, the vast majority of the farms in these drought-ravaged areas are protected by crop insurance,” said Tom Zacharias, president of National Crop Insurance Services, in a statement released to the media. Zacharias noted that farmers purchase crop insurance policies to protect themselves against situations just like this, although many have never collected an indemnity. “This year, their decision to purchase crop insurance confirms their practice of sound risk management,” he said.

While there continues to be speculation about the ultimate cost of the 2012 drought, it is still too early to provide precise estimates of the losses. Zacharias explained that NCIS is analyzing the August 10 report and will compare that with reports from the field along with the crop insurance policy data that is still being processed and reported to the Risk Management Agency.

It will be hard to gain a complete picture of the situation and final outcomes will vary by state, crop and types of policies purchased. “What is certain is that the crop insurance industry is on the ground in the drought-stricken areas, mobilizing loss-adjuster teams,” Zacharias pointed out.

“Farmers can be assured their claims will be paid, and that the companies will move as quickly and as efficiently as possible, given the expected volume of claims, to assess damages and get indemnity checks into the hands of farmers.”

In order to be approved to sell federal crop insurance, companies must have adequate surplus and reinsurance at their disposal so that even if a catastrophe of this magnitude strikes, and then one strikes again the next year, the company is still capable of paying indemnities on the policies they sell.

In addition to company surplus and reinsurance, the federal government serves as the backstop reinsurer for all companies that sell crop insurance. As such, the federal government shares in the gains and the losses of the program. Gains in prior years can and will be used to offset losses in years like this one.

Zacharias explained that the industry has 5,000 claims adjusters and 15,000 agents working tirelessly right now to help growers cope. These adjusters are working hard to get money to farmers who have suffered losses, already paying out more than $1 billion in indemnities to date. Companies are also mobilizing adjusters away from other parts of the country that have not been affected by drought and sending those adjusters to the hard-hit states.

“With their crop insurance policies in hand, farmers will not only survive this drought but plant again next year, ensuring a continuity of the food, feed, fiber and fuel supply for this nation and an increasingly hungry world,” he added.