Posts

As Farm Bill Discussions Get Underway, NCIS Unveils Updated Website

OVERLAND PARK, Kan., June 5, 2017 – National Crop Insurance Services (NCIS) is pleased to announce it has updated and redesigned the award-winning Crop Insurance in America website. The revamped website aims to effectively share crop insurance’s success story by offering visitors streamlined access to the latest news and information on crop insurance, as well as encouraging interaction on social media channels.

The site has a crisp, clean design, improved social media sharing tools, and increased security settings.

Features include an updated comprehensive question-and-answer resource, Just the Facts, that lays out the facts about crop insurance and dispels some of the most common arguments against crop insurance put forth by its critics.

The site also features a robust news section that houses recent press releases, the association’s What’s Cropping Up newsletter, relevant headlines, quotes, and other resources, including social media content for easy sharing.

Other items available on the site include updated fact sheets on the importance of crop insurance to individual states; farmer testimonials; a detailed history of the program; a look at the essential strengths of the program, and more.

“The crop insurance program is the cornerstone of the farm safety net and has a great story to tell,” said Tom Zacharias, president of NCIS. “We hope this updated website will provide visitors with a better understanding as to why crop insurance is so valuable, not just to farmers, but to taxpayers as well, and will encourage them to share its success story with others.”

NCIS launched this website in 2008 to better explain the benefits of crop insurance to farmers, taxpayers, and consumers, and to demonstrate how the program helps drive the nation’s rural economy.  In 2015, NCIS was honored to have the website selected by the United States Library of Congress (LOC) to be part of America’s historic collection of Internet materials.

Click here to explore the updated Crop Insurance in America site.

###

Crop Insurance Payments Not a ‘Bailout’ for Farmers

Farm income is forecast to increase over last year, helped by insurance payouts from the crop-insurance program covering losses from the disastrous drought in much of the country, but a insurance associations argue that the program is not a “bailout” that guarantees profits for farmers.

The 2012 Farm Sector Income Forecast from the United States Department of Agriculture says net farm income is forecast to be more than $122 billion this year, up close to 4 percent over last year.

The USDA, which issued its report during the last week of August, says that the increase will, in part, be helped by crop-insurance payments. The forecast also reflects market impacts of “widespread drought and high temperatures during the growing season [and] large increases in the value of this year’s crop….”

Drought conditions are putting corn and soybean yields at nine-year lows, the report says, but the factors hurting corn producers helps another segment of the farm market: wheat farmers. Wheat farmers will see prices increase by almost 13.5 percent, says the report, with the increase in demand to replace corn with wheat.

CROP INSURANCE IN ACTION: Mike Garavaglia, Vero Beach, Florida

Florida accounts for roughly 70 percent of the U.S. annual production of citrus, of which the vast majority goes into processing, mostly for orange juice. Citrus is big business in the Sunshine State, and Mike Garavaglia is one of Florida’s many citrus growers who make their living putting fresh citrus on the tables of America’s families.

Mike and his family own and operate 4,000 acres of citrus groves, which have been in the Rogers family for four generations. The family’s business, known as “The Packers of Indian River,” specializes primarily in fresh citrus for consumption – producing oranges, tangerines and grapefruit.

The family’s groves are geographically diverse, spanning three counties on both the east and west coasts of the state, but geographic diversity doesn’t always protect you from the whims of Mother Nature. “We have manageable and unmanageable risks,” says Garavaglia. “We try to eliminate as many of the preventable issues as possible, which include insect damage, bacterial and fungal diseases that attack the tree and crops.”

But what they can’t manage are large weather events like hard freezes, hurricanes and floods. Garavaglia has seen his share of natural disasters, with three hurricanes hitting the groves in 2004 and 2005 — at a time when the groves are especially vulnerable. “By the time August rolls around, you’ve invested about 90 percent of your care taking in the crop, and you are keeping your fingers crossed and hoping for a good harvest,” he said.

But nothing can really protect a grove, or the fruit on the trees, from a hurricane. “The fruit is too immature to harvest, and it’s very susceptible to high winds,” he adds. That’s where crop insurance comes into play. Garavaglia purchases the maximum buy-up of multi-peril insurance, “because over the years, that’s what has proven to work the best for us,” he says.

When a hurricane blows a good portion of the ripening crop onto the ground, “the fruit is shot,” he says. “And if the winds are high enough, it can take the trees years to recover from the damage.”

Another major threat to Florida’s premier citrus industry, and one that made its presence known in 2011, is a “hard freeze” – periods when temperatures go below 28 degrees for four or more hours. This can not only rob a grower of their harvest – which is their income for the year – but can kill the grove as well, if the freeze is long and hard enough.

 

“You can do everything humanly possible to mitigate the damage during a freeze, but you certainly can’t stop it,” he said. Garavaglia says that in the winter of 2010 and 2011, his groves endured three nights of temperatures that were as low as 22 degrees.

“When a freeze is on the way, growers spend a significant amount of money to prevent damage by flooding their groves and installing micro-jet irrigation to mist the trees,” he says. “But when it gets so cold for so long, as it did in 2011, you just know that there is going to be some major damage to the crop, or the trees, or both,” he said.

Unlike other weather events, it’s really impossible to assess the extent of the damage of a hard freeze for weeks, or even months. That’s because when those long, cold nights are finally over, it can take several weeks before the fruit starts to drop. “Initially, we lost about 20 percent of the crop on the ground,” he said. “Done.”

And then over the rest of the season, every box that is brought in has to be specially inspected with samples removed to ensure that parts of the fruit were not dried out from the freeze. ”Even if it stays on the tree, half of what’s remaining can be completely dried out and not marketable,” he notes.

Garavaglia explained that crop insurance is different with citrus than with row crops in the Midwest because it can take months to fully assess the damage.

“Within several weeks of a deep freeze, an adjuster will visit the grove, and he can spend weeks there going through the damage,” said Garavaglia.

“Fruit can continue to drop for two to three months, which means the adjusting can take months before it is complete,” he explains. But even then, the adjuster is often tasked with checking back after harvest to see if any more fruit was lost during inspection. “Because of the length of time it takes to assess the damage, claims can take months to finalize,” he said.

Garavaglia recounted a crop insurance vignette from a decade ago that demonstrated the critical role crop insurance plays in helping growers bounce back from adversity. The family had purchased another grove and had closed on the deal in August. In late December/early January, they were hit with a hard freeze and lost nearly 60 percent of the crop immediately. “You put your whole life savings into a crop every year, and to completely lose a return on an investment, it could wipe you out,” he said.

“If we didn’t have crop insurance, we would have lost the grove.”

Garavaglia says that while crop insurance doesn’t replace a harvest, it’s a critical tool for growers to mitigate some of their biggest risks. “Crop insurance pays for about 65 percent of what it takes to get a crop to market,” he says. “Nobody is making a profit on crop insurance, but it’s a great way to provide some risk mitigation on things we can’t control,” he added.

Crop insurance will cover massive losses

In spite of the depth and far-reaching impact of the drought that has gripped more than half of the nation’s agricultural production area this summer, farmers should have no worries regarding their crop insurance policy’s ability to pay.

“The crop insurance industry is on the ground in the drought-stricken areas, mobilizing loss-adjuster teams,” says Thomas P. Zacharias, president, National Crop Insurance Services in a statement released today.

“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,” Zacharias says.

Claim volume will be huge. Recent USDA crop report estimates indicated significant losses for corn and soybeans, result of the heat stress and extreme drought that covers much of the Corn Belt.

“Although this was the largest corn crop planted since 1937, production is projected to be down 13 percent, the lowest output since 2006,” Zacharias says. “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. Soybean production is forecast to be down by 12 percent from last year, and if realized, would have the lowest average yield since 2003.”

Zacharias says most farmers in drought-stressed areas are covered by crop insurance.

“Some farmers in these affected areas have purchased crop insurance policies for years and have never collected an indemnity. This year, their decision to purchase crop insurance confirms their practice of sound risk management.”

Crop insurance will cover massive losses

In spite of the depth and far-reaching impact of the drought that has gripped more than half of the nation’s agricultural production area this summer, farmers should have no worries regarding their crop insurance policy’s ability to pay.

“The crop insurance industry is on the ground in the drought-stricken areas, mobilizing loss-adjuster teams,” says Thomas P. Zacharias, president, National Crop Insurance Services in a statement released today.

“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,” Zacharias says.

Claim volume will be huge. Recent USDA crop report estimates indicated significant losses for corn and soybeans, result of the heat stress and extreme drought that covers much of the Corn Belt.

“Although this was the largest corn crop planted since 1937, production is projected to be down 13 percent, the lowest output since 2006,” Zacharias says. “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. Soybean production is forecast to be down by 12 percent from last year, and if realized, would have the lowest average yield since 2003.”

Zacharias says most farmers in drought-stressed areas are covered by crop insurance.

“Some farmers in these affected areas have purchased crop insurance policies for years and have never collected an indemnity. This year, their decision to purchase crop insurance confirms their practice of sound risk management.”

Crop insurance adjusters making rounds before fall harvest

In this drought, crop insurance has turned into a lifeline for many farmers in the Tri-States.

The U.S. Department of Ag says it expects corn growers to average 123 bushels per acre, which is down 24 bushels from last year. The federal government says corn growers could end up with their lowest average yield in 17 years as the drought continues to take its toll.

The USDA has started sending letters to farmers, explaining what things farmers need to know before having an insurance adjuster on site to evaluate their crops.

“There would be an awful lot of people out here today that would be extremely concerned with this drought if we didn’t have crop insurance,” farmer Dan Hugenberg said.

Hugenberg says insurance is his life line this year as he watches the drought destroy his corn crop.

“I’ve got $400,000-500,000 invested in this crop and if I come out with a 30 bushel yield or 20 bushel yield, and if I only come out with $160,000, it takes a long time to recover,” Hugenberg said.

NCIS Responds to August 10, 2012, USDA Crop Progress Report

The following statement is in response to the August 10 USDA Crop Report. The statement should be attributed to Thomas P. Zacharias, president, National Crop Insurance Services.

“As expected, the Agriculture Department lowered the corn and soybean production forecast in its August 10 crop production report released today, due to heat stress and extreme drought throughout much of the Corn Belt.

“Although 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. Farmers purchase crop insurance polices to protect themselves against situations just like this. Some of the farmers in these affected areas have purchased crop insurance policies for years and have never collected an indemnity. This year, their decision to purchase crop insurance confirms their practice of sound risk management.

“Obviously, there will be continued speculation about the ultimate cost of the 2012 drought. Even with today’s report, it is still too early to provide precise estimates of the losses. We are 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 RMA. Again, we do not yet have 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. 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.

“In terms of the industry’s ability to handle the claims load that will be generated over the next several months, 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 $822 million 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.”

 

###

 

Crop Failed? There’s Insurance for That

Tess Vigeland: Congress left for its summer vacation without coming up with a drought relief package for farmers and ranchers.

But that doesn’t mean they’re all left high and dry. A lot of farmers are going to get help from crop insurance. And that could put a crimp in the bottom line of insurance companies — and taxpayers. Marketplace’s Adriene Hill explains.

Adriene Hill: Corn is supposed to be green and tall this time of year.

It’s not.

Doug Yoder: It’s brown.

Doug Yoder is with the Illinois Farm Bureau. He says it’s brown and/or short, depending on where you are.

But scrawny plants don’t always add up to scrawny paychecks. Most corn and soybean farmers — and we’re talking big-scale farmers here — have crop insurance. The feds pick up a big part of the tab, farmers pay the rest.

Yoder: Anybody that drops a seed in the ground and hopes to make a living on that, you’re accustomed to taking risks. But there are also limits to those risks that you can take, and we’ll be testing those limits this year. There’s no doubt about it.

Crop Failed? There’s Insurance for That

Tess Vigeland: Congress left for its summer vacation without coming up with a drought relief package for farmers and ranchers.

But that doesn’t mean they’re all left high and dry. A lot of farmers are going to get help from crop insurance. And that could put a crimp in the bottom line of insurance companies — and taxpayers. Marketplace’s Adriene Hill explains.

Adriene Hill: Corn is supposed to be green and tall this time of year.

It’s not.

Doug Yoder: It’s brown.

Doug Yoder is with the Illinois Farm Bureau. He says it’s brown and/or short, depending on where you are.

But scrawny plants don’t always add up to scrawny paychecks. Most corn and soybean farmers — and we’re talking big-scale farmers here — have crop insurance. The feds pick up a big part of the tab, farmers pay the rest.

Yoder: Anybody that drops a seed in the ground and hopes to make a living on that, you’re accustomed to taking risks. But there are also limits to those risks that you can take, and we’ll be testing those limits this year. There’s no doubt about it.

Drought May Cost $20 Billion in Crop Insurance

WASHINGTON (CNNMoney) — As the drought continues to ravage the nation’s corn, wheat and soybean fields, crop insurance losses are expected to break records.

With nearly half of the continental United States under severe drought conditions, crop insurance losses are mounting daily, according to a report from the National Drought Mitigation Center at the University of Nebraska-Lincoln released on Thursday.

“It will be a major loss situation,” said Thomas Zacharias, president of the National Crop Insurance Services, a lobbying group representing private crop insurers. “The companies are in the field adjusting claims as we speak.”

An economist with the group roughly estimated that losses could top $20 billion.

And taxpayers will ultimately shoulder most of the cost the nation’s scorched fields.

While there are no official estimates available yet, National Crop Insurance Services Economist Keith Collins said crop losses this year look as bad or worse than other terrible drought years.

 

Drought May Cost $20 Billion in Crop Insurance

WASHINGTON (CNNMoney) — As the drought continues to ravage the nation’s corn, wheat and soybean fields, crop insurance losses are expected to break records.

With nearly half of the continental United States under severe drought conditions, crop insurance losses are mounting daily, according to a report from the National Drought Mitigation Center at the University of Nebraska-Lincoln released on Thursday.

“It will be a major loss situation,” said Thomas Zacharias, president of the National Crop Insurance Services, a lobbying group representing private crop insurers. “The companies are in the field adjusting claims as we speak.”

An economist with the group roughly estimated that losses could top $20 billion.

And taxpayers will ultimately shoulder most of the cost the nation’s scorched fields.

While there are no official estimates available yet, National Crop Insurance Services Economist Keith Collins said crop losses this year look as bad or worse than other terrible drought years.

 

Despite Crop Insurance, Drought Still Stings Farmers

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

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

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.”

# # #

 

Don’t Throw Specialty Crops Under the Bus

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.

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

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

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

Keeping Crop Insurance Strong

This ongoing series presents one of the many strengths of crop insurance per month and details how the sum of the 12 essential crop insurance strengths has given us the successful program we have today. These strengths are especially important as policy makers contemplate further cuts to farm safety net policies.

Strength: Producers do not receive unnecessarily excessive payments.

Crop insurance payments are related to actual crop loss due to price volatility or natural disaster, whereas some farm program payments are not related to need or performance. In addition, a trained crop insurance loss adjuster assesses the producer’s claim, thereby rewarding proper effort and appropriately protecting against events beyond the producer’s control.

To ensure that this safety net policy works properly, crop insurance companies employ more than 4,700 certified crop loss adjusters who are well trained to accurately assess production losses. This ensures the veracity of the policy and helps to reduce waste, fraud and abuse.

To view all of the essential strengths, click here.

Rural America’s Roller Coaster

Things were going well in rural America.

The Federal Reserve Bank of Kansas City credited small towns, specifically farming communities, with leading the country’s recession recovery in 2010.

Farm household incomes climbed. Agricultural exports reached new records. Buying power from the Heartland trickled out to the coasts. Farm policies came in well under budget. Crop prices for many commodities grew to help offset increasing input costs (if you think filling up an SUV once a week is expensive, try filling up a tractor or combine multiple times a day).

And the Fed said the good news should extend into 2011, unless something unforeseen happened.

It did, and Mother Nature rained on the parade. And rained and rained and rained — or in some parts of the country, kept the rain from coming at all.

Droughts have destroyed wheat crops in the Plains and have already cost Texas farmers and ranchers $1.5 billion, according to Texas A&M University.

Meanwhile, moisture made it difficult for many corn farmers to plant their crops — for example, only 11 percent of the Ohio crop was in the ground by mid May, compared to the normal 80 percent.

And don’t forget the floodwaters along the Mississippi River from Illinois to Louisiana and in the Red River Valley. Or the damaging spring tornadoes that hammered the Midwest and South. These disasters took lives and destroyed communities along with valuable farmland.

Bad weather is nothing new to farmers. They know the risks when they get into the business, and they hope there are enough 2010’s to offset the 2011’s. The question becomes: how do you weather the storm in a lean year to still be around for another?

That is where our nation’s farm policy comes into play — to provide some stability for our farmers and for the country’s food and fiber supply while limiting taxpayer exposure.

A good example of this is crop insurance. Farmers buy policies, made possible with government investment, to act as a cushion. When disaster strikes, private insurance companies cover the bulk of the losses, shielding taxpayers from tremendous risk exposure. But, without the public partnership, multiple peril insurance on a crop — something we take for granted on our cars and homes — would not be possible.

Banks also extend annual operating capital to growers — yearly loans that usually exceed the amount most Americans will borrow in a lifetime — without any knowledge of what the weather will bring. They are willing to make the loans because crop insurance and farm policies are in place to act as a backstop to the kind of farm financial crisis America experienced in the mid and late 1980s.

But for how long will that backstop be in place? Farm policy was cut sharply in 2006, 2008 and again last year—making agriculture among the only sectors to make a sacrifice toward deficit reduction. Still, farmers find themselves in the crosshairs yet againthis year.

A lot hangs in the balance as lawmakers determine whether crop insurance and other vital farm policies will survive.

Besides providing us all three square meals a day, the country’s 210,000 remaining full-time farmers underpin 21 million U.S. jobs and annual economic activity larger than most foreign countries’ GDPs.

Retired Army General and Supreme Allied Commander of NATO Wesley Clark recently credited these men and women with being key to the country’s security, calling them “a thin green line standing between prosperity and disaster.”

As our country struggles to get back on its feet, and rural America picks up the pieces following a string of violent storms, it’s time to put an emphasis on holding the thin green line.

So this week, we are teaming up to bring this timely message to Washington.

Considering it’s all made possible for less thanone-quarter of one percent of the federal budget, it is under budget, and it has already contributed $15 billion toward deficit reduction, we have a good story that should resonate with everyone, regardless of their political stripes.

After all, not everybody farms, but everybody eats.

Authors: Teresa Scanlan, a native of Gering, Neb., is Miss America 2011. Larry Combest, a Republican from West Texas, was a member of the U.S. House of Representatives from 1985 to 2002 where he served as Chairman of the Select Committee on Intelligence and the Agriculture Committee. He currently lobbies for numerous agricultural organizations, including crop insurance agents.

This op-ed appeared on The Hill on June 6, 2011.