Echoing the same message heard throughout the halls of Congress in 2012, a panel of farm leaders recently urged Congress to “do no harm” to crop insurance in the upcoming farm bill and to remember that crop insurance is a top priority for most of America’s farmers.
Robbie Minnich, senior government relations representative with the National Cotton Council, pointed out that one of the key strengths of crop insurance is that farmers and agents sit down and draw up a risk management strategy tailored specifically for that farm.
“Crop insurance policies come in a wide array of styles and coverage and the farmer can very closely tailor their policy to their specific farm situation and risk tolerance. It’s certainly not a ‘one-size-fits-all’ strategy,” he said.
“It is critically important that farm policy includes avenues for farmers and ranchers to manage the risk of bad yields and wild market swings,” said Mike Stranz, a government relations representative with National Farmers Union.
“The current system of crop insurance has done a good job of that and must to continue to improve,” he added. “Crop insurance helps ensure that the nation’s food, feed, fiber and fuel supply remains stable and affordable.”
Brooke Shupe, manager of government affairs for risk management for the National Association of Wheat Growers, noted that crop insurance is critical in wheat country, particularly given the ongoing drought.
“Crop insurance is a critical risk management tool for wheat producers. That’s why the vast majority of the nation’s wheat farmers purchase it every year,” she said.
Cuts would reduce effectiveness
Sam Willett, senior director of public policy at the National Corn Growers Association, said, “cuts in the crop insurance program would reduce the effectiveness of the most important risk-management tool farmers have. We can’t afford to dilute our best risk management tool. The federal crop insurance program’s performance this past year in protecting producers from financial disaster, especially younger farmers, explains why it is the most important risk management tool.”
Several of the panelists expressed concern that crop insurance could come under pressure as budget constraints tighten, which could harm both the participation levels and overall effectiveness of the program.
“One of the keys to the success of crop insurance is the widespread participation by farmers,” noted Mary Kay Thatcher, senior director of congressional relations with the American Farm Bureau Federation.
“If Congress does anything to reduce the level of participation, there could be a tremendous outcry for some sort of federal intervention the next time we have a widespread natural disaster,” she added.
Reece Langley, vice-president of government affairs with the USA Rice Federation, pointed out that crop insurance and other farm policies have already taken budget cuts in the name of deficit reduction.
“When making decisions in the upcoming farm bill, it should be remembered that agriculture has already sustained more than $12billion in budget since 2008.”Langley noted,
“USA Rice has been actively working in recent years to improve crop insurance so that it is more effective and affordable for rice producers, and we are encouraged by some recent steps taken by the Risk Management Agency. However, crop insurance cannot serve as the sole safety net for producers, especially with respect to multi-year price declines.”
Dennis Nuxoll, vice-president of federal government affairs with Western Growers underscored the importance of crop insurance to his organization. “Crop insurance is already a critical management tool for many farmers. But for specialty crop farmers, the use of crop insurance products has not been as common,” he said.
Nuxoll explained that the farmers he represents grow hundreds of different crop types under a huge variety of growing conditions. “Thus, there’s work ahead for us to tailor these products so they serve as the best, strategic risk management tools possible,” he said.
“With ever-growing challenges, our growers are increasingly focusing on these products as tools they could use.”