Yes. By helping to stabilize financial returns in agriculture, crop insurance maintains and promotes investment in production capacity, enables the production sector to rebound quickly after disaster, and allows producers to pay credit obligations and other input expenses. With crop insurance, farmers are entering into a contract with private insurers. That gives much more certainty to farmers during the critical time of planting than some ad hoc disaster assistance expectations that have no contractual basis.
This helps American agriculture maintain its position as having the greatest farm production infrastructure in the world and supports the rural economy by protecting and enhancing farm input supply and output distribution businesses. Thus, crop insurance protects jobs, both on and off the farm. Crop insurance also facilitates forward marketing, which helps stabilize costs for distribution and processing businesses, making them more efficient.
Federally supported crop insurance is a crucial investment for society for two main reasons. First, it underpins the financial health of food, feed, fiber and biofuel production that benefits consumers. Second, it contributes to the well-being of all farms – large and small – and promotes rural economic development, particularly in the farm-dependent areas of the country.
Private-sector crop insurance companies also make a significant direct contribution to rural economic growth and job creation by employing more than 20,000 people across the nation, most who live and raise their families in rural America.
To learn more about why crop insurance is so important to the economy of Kern County, California, and other rural economies like it, watch this video.