ICYMI: Crop insurance critical to farmers
By: Jim Obermiller
Published in the Omaha World-Herald
May 1, 2017
Here in central Nebraska, raising corn is a way of life.
I got started when I was 21 with 160 acres I bought from my grandmother. Today, my wife, Linda, and I farm 3,000 acres of corn. I’m 66 now, and I’ve seen a lot of changes in farming over the years.
Farms are much more productive thanks to advancements in technology. But it takes a lot more land, equipment, planning and investment to grow a modern corn crop and get it to market at a price that allows a family to make a living.
Luckily, we’re pretty efficient in Nebraska.
Last year, we grew $6 billion worth of corn across the state. Of course, that $6 billion in output means farmers had to spend billions of their own money growing the crop.
That’s a lot of risk, and without a strong crop insurance system in place, we couldn’t do it. We couldn’t obtain the capital needed to farm today without lenders being confident that we’re properly managing weather and market risk.
Crop insurance is a unique public-private partnership that protects my investments and protects taxpayers, who no longer have to fund all of the farm safety net.
Before crop insurance, farmers went to Congress after every disaster and asked for help through expensive, unbudgeted relief bills. That wasn’t fair to taxpayers, who picked up 100 percent of the tab.
And because the legislative process took so long, it wasn’t fair to farmers, who needed help immediately.
That is why farmers are willing pay a lot from their own pockets for a crop insurance policy that is specifically tailored to their operation.
In fact, a full-time corn farmer might spend tens of thousands of dollars for a policy and the peace of mind it provides.
Even though we invest a lot in these policies, we hope we never need to cash them in. Because if we’re filing an insurance claim, it also means we’re shouldering a deductible and will have a loss that year. Crop insurance is designed to help you pick up the pieces, not profit.
I’ve seen this firsthand in the drought of 2005 and the violent hail storms in 2014 that brought moderate to severe damage to 16 out of 18 of our fields. I didn’t make any money those years, but I also didn’t go out of business.
That is a far cry from the tough times in the 1980s, before crop insurance was as popular as it is today. Back then, prices were low and farmers feared for their livelihoods.
Prices are also low today, but modern crop insurance takes the fear out of farming. No wonder crop insurance is the top policy priority for most farmers in this upcoming farm bill.
The new administration has promised to protect American jobs and American farms. Keeping crop insurance affordable and widely available is a great way to live up to that promise.
The writer is a lifelong farmer in Loup City, Nebraska.