CROP INSURANCE IN ACTION: Mike Quinn, Garner, North Carolina
If there’s anything the droughts of 2011 and 2012 have taught American farmers, it’s the importance of being prepared for anything.
That includes occasional years of dealing with dry conditions trying to grow the Carolinas’ homegrown cotton crop.
J. Michael Quinn, the president and CEO of Carolinas Cotton Growers Cooperative, Inc., has witnessed how both droughts and hurricanes can wreak havoc on farms and cause lost income for farmers.
What is important is how such risks are mitigated now that farmer-members have turned to crop insurance coverage for protection.
“Crop losses will occur from time to time,” he noted, adding “these losses would be devastating to private underwriting and cost prohibitive without a public/private partnership to underwrite and deliver the appropriate protection.”
He maintained the widespread crop losses of 2011 and 2012 due to drought are a “clear reminder of the need for crop insurance protection.”
The farmers who are members of the cooperative have also had to deal with the terrible destruction of hurricanes, which seem to strike the Carolinas like clockwork.
In 1999, Hurricane Floyd dumped so much rain and caused such heavy destruction and flooding in the Carolinas — which had suffered from Hurricane Dennis just weeks before — that the World Meteorological Organization has retired the name.
In all this devastation, which could very well have bankrupted many farmers, those who had purchased crop insurance were able to roll with the punches and come back the following year.
“Crop insurance is very vital in a farmer’s overall risk management strategy,” said Quinn.
Crop insurance and the marketing loans are major provisions in the Farm Bill, and play an important role in cooperative marketing. He said the marketing loan program has allowed cooperatives like Carolinas Cotton Growers Cooperative “to facilitate loans on behalf of the producer while the crop is being marketed.” Crop insurance is a risk management tool the growers can customize to their individual needs, he added.
The 91-year-old cooperative, headquartered in Garner, North Carolina, provides marketing services by connecting members to textile customers around the world. The cooperative manages the logistics of moving the members’ cotton in the world supply chain in an efficient manner and provides the latest tools for members to hedge risks inherent in production agriculture.
“The nature and volatility of agricultural production necessitates the need for an adequate safety net for producers who take substantial risk in producing crops,” said Quinn.
A solid Farm Bill, he said, gives agricultural lenders a “certain degree of confidence in terms of multi-year lending of agricultural production and ensures a certain measure of food and fiber security.” A well-crafted farm bill is as important to American farmers as it is to American citizens, he said.
Crop insurance is a program that ensures that farmers who suffer possibly catastrophic losses from droughts and floods can survive and stay in business. The risk management tool provides coverage to over one hundred crops, and offers producers a variety of options to choose from depending on how much they are willing to spend and their tolerance for risk.