(OVERLAND PARK, Kan.) \u2014 As the House Agriculture Subcommittee on General Farm Commodities and Risk Management prepares to hold a hearing later this week, National Crop Insurance Services (NCIS) today released the second in an ongoing series of educational videos on crop insurance. This video puts a sharp focus on the risk that Texas farmers \u2013 who received roughly one-quarter of all indemnities in 2011 \u2013 faced in last year\u2019s historic and ongoing drought.<\/p>\n
The video, titled \u201c2011 Southwest Case Study,\u201d contains an overview of the catastrophic drought by NCIS President Tom Zacharias, highlighting the extent of the damage throughout the state and the role crop insurance played in mitigating that damage. Additionally, two Texans were interviewed to better explain farmers\u2019 ability to survive the drought and bounce back to plant again in 2012.<\/p>\n
Rick Boyd, a banker with First United Bank in Lubbock, explains that many banks require farmers to purchase crop insurance to secure their loans. Boyd noted that if it wasn\u2019t for crop insurance, any Texas farmers might not be back in their fields planting again this year. \u201c2011 was such that, with the insurance, we did not have any farmers that actually went out of business, and over 90 percent of our customers had to draw on their insurance claims,\u201d he said. \u201cThe programs were in place that allowed them, not to make a profit, but to actually get a lot of their expense money back and that was enough to enable them to get financing for the upcoming year,\u201d he added.<\/p>\n
Texas farmer and rancher Matt Huie notes that while 2011 started out hopeful, his crops and pastures eventually withered away and he was eventually forced to import hay from out of state to feed his cattle. \u201cWhat we learned from the drought of 2011 is that good policy can create survivors in an industry that otherwise would have no survivors,\u201d he adds.<\/p>\n
2011 crop insurance indemnities have surpassed $10.7 billion and continue to rise. \u201cThe fact that there has not been a single call for disaster assistance from farmers \u2013 despite the fact that we just endured one of the worst weather years in history \u2013 is proof perfect that crop insurance is a smart, cost effective policy for taxpayers and critical risk management tool for farmers,\u201d said Zacharias.<\/p>\n