It is unfortunate that the Chicago Tribune would choose to criticize crop insurance, a new hybrid of private-public risk management that is saving taxpayers lots of money and shielding them from risk (“Farm Bill? Later. Political gridlock may save U.S. from bad farm legislation,” Editorial, Sept. 17).<\/p>\n
In the past, agriculture disasters like this year’s historic drought would have resulted in huge and costly agriculture disaster bills. In fact, since 1989, 42 such bills cost taxpayers $70 billion, according to the Congressional Research Service.<\/p>\n
Crop insurance represents a whole new chapter in agriculture risk management. First and foremost, farmers must purchase a policy \u2014 ensuring that they have “skin in the game” \u2014 to be eligible to collect an indemnity for damages. In 2011, farmers paid more than $4.5 billion in premiums.<\/p>\n
Since the emergence of the modern-day crop-insurance system, spending on farm safety-net programs has gone down by roughly 36 percent. Crop insurance alone has had its funding reduced by $12 billion since just 2008.<\/p>\n
Last year’s string of natural disasters lasting the entire year was a case study in the efficacy of crop insurance. Despite freezes, floods, droughts, wildfires and hurricanes, there was not a single call fordisaster assistance from America’s farmers.<\/p>\n
Why is that? Because 84 percent of eligible farmland, some 266 million acres growing food, feed, fuel and fiber for this nation and the world, was protected by crop-insurance policies.<\/p>\n
Crop insurance has become the most lauded risk management tool by farmers, bankers and many elected officials of both parties for onereason: It works.<\/p>\n
In today’s politically charged environment, there are few things that both Republicans and Democrats can agree upon. Yet despite thatfact, members from both sides of the aisle have voted for a strong crop-insurance policy as a cornerstone risk-management tool in the 2012 Farm Bill.<\/p>\n
\u2014 Thomas P. Zacharias, president, National Crop Insurance Services, Overland Park, Kan. (September 25, 2012)<\/p>\n
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