Keep Crop Insurance Out of the Crosshairs
The passage of the 2014 Farm Bill was the beginning of a new chapter in U.S. farm policy, putting to rest most of the old farm support programs and replacing them with a reformed farm safety net and its centerpiece: Crop insurance.
Unlike farm programs of the past, only farmers who purchase crop insurance enjoy its protection. In fact, when a farmer purchases crop insurance, they are handed a bill, not a check. Crop insurance is not cheap by any stretch of the imagination, with farmers paying tens of thousands of dollars per year on premiums for policies that most of them will hopefully not need.
The Farm Bill was a grand compromise. In exchange for $23 billion in spending cuts programs, Congress required market-oriented reforms to commodity programs and made a five-year commitment to ensure the affordability, availability and viability of crop insurance. Unfortunately, anti-farmer groups are targeting crop insurance with proposed cuts that would seriously hamstring the private sector delivery that is the hallmark of success for the program. That would not only threaten to make the system unworkable for farmers, but also endanger the reliability of our nation’s food supply.
Farmers and farm groups value crop insurance because it combines the efficiency of the private sector with the universal coverage of the public sector. Today, virtually any farmer who wants to purchase crop insurance can, and here in Wisconsin, farmers spent roughly $86 million out of their own pockets to do so this year alone. Nationally, that number usually exceeds $4 billion annually.
Remember the historic drought of 2012 that threatened the nation’s heartland and was compared to the dreadful days of the great Dust Bowl? In the past, a disaster of that magnitude would have triggered an overly expensive and completely taxpayer-funded disaster bill. And although those funds were appreciated, they could take months or years to arrive, oftentimes too late to stop a foreclosure.
Things have changed dramatically now that farmers have much improved access to crop insurance, which now protects more than 90 percent of planted cropland. When the drought laid siege to the nation’s heartland, private sector crop insurance adjusters were quickly on the scene, and indemnity checks were usually in the hands of farmers who had verifiable losses in weeks, not months.
Crop insurance worked so well in 2012 that the nation’s farmers bounced back the next year and produced an enormous bounty of grains. And there wasn’t a single call for a disaster bill.
Farmers are the engines that drive the economy of rural America, and without a sufficient safety net in place – like crop insurance – that entire equation is at risk. That is why not only farmers, but ranchers, input suppliers, processors, and equipment companies have all called on Congress to protect crop insurance from any further cuts.
As a farmer, I can tell you that I take great pride in what I do and I understand the important role I play in producing the nation’s food, fiber, feed, and fuel supply. It seems that farmers and consumers alike here in Wisconsin need to remind our congressional delegation of this fact as well.
Tom Gillis is president of the Wisconsin Corn Growers Association. This op-ed appeared in Wisconsin AgConnection on December 3, 2015