Farmers Sometimes Need A Little Help When Mother Nature Throws a Fit

2011 was a year that American farmers will not soon forget. The year started off with a record freeze in Florida, followed by historic flooding in the Corn Belt. While farmers were trying to salvage their waterlogged fields in the Midwest, folks in the southern plains were baking under intense heat and a prolonged drought, which still hasn’t broken. And then there was Hurricane Irene, that ravaged the East Coast, from North Carolina to the Canadian border.

Thankfully, decades ago, Congress recognized that because Mother Nature is prone to be nasty at times, policies need to be in place to ensure that when she does, farmers are able to pick up the pieces, rebuild and plant again the following year. The policy that has gained national recognition as the best risk management tool available is crop insurance.

Crop insurance is a public-private partnership, designed to ensure that when disaster strikes, the private sector – crop insurance companies – are there to help shoulder the risk and the financial burden of rebuilding. Crop insurance policies are purchased by the farmer and suited to the farmer’s needs, comfort with risk and financial situation.

In the past, before purchasing crop insurance was the widespread and widely available option, disasters like last year’s would have triggered large, stand-alone disaster bills in Congress, aimed at trying to save as many farms as possible. Those bills would have cost taxpayers dearly, and unfortunately, would have taken months, or even several years to finally get into the hands of the farmers who need the help. Not a good situation for either party involved.

In 2011, with 80 percent of eligible lands protected by crop insurance, private sector companies paid out in excess of $10.7 billion in payments to farmers who had purchased plans and suffered losses. Those checks were often in the hands of the farmers in 30 days or less after they completed the necessary paper work. It’s because of the effectiveness and efficiency of crop insurance that many of us are in our fields planting today instead of being forced to auction off our farms.

The notion that crop insurance is some kind of freebee for farmers is nonsense, because a farmer can only collect an insurance payment if he suffers verifiable damages. The idea that a farmer purchases crop insurance in hopes of watching his crops be destroyed makes about as much sense as the notion that a person purchases homeowners insurance and prays every day that his house will burn down.

Not to mention, farmers pay out of their own pockets for a significant part of the insurance premiums. Stand-alone disaster bills, by comparison, are 100 percent funded by taxpayers.

Let’s not forget what it is that we’re asking farmers to do for the nation: Grow our food, grow our fuel, grow our fiber and grow the feed we need for the meat and poultry we like to consume. This is a big responsibility for the tiny fraction of our fellow Americans called farmers.

The taxpayer cost of ensuring security for these basic public needs would have been astronomical in 2011 without privately delivered crop insurance in place. Crop insurance has become the risk management tool of choice by farmers representing the vast majority of American crops and policy-makers representing both sides of the aisle for one simple reason. It works.

Congress is debating the 2012 Farm Bill and our message to them on behalf of farmers and the American public is simple: Do no harm to crop insurance.

John Mages is president of the Minnesota Corn Growers Association, and lives in Belgrade, Minnesota where he farms with his wife Cindy.

This op-ed appeared on May 11, 2012 on AgNet.