The increasingly important role of crop insurance to farmers, ranchers and producers across the country – and its place of prominence in the 2014 Farm Bill – were among the many topics of conversation during Mike Adams’ recent interview with NCIS President Tom Zacharias on Agri-Talk.
“We think this is a very positive Farm Bill for farmers and ranchers in the U.S. and for the crop insurance industry in general,” said Zacharias.
Zacharias pointed out that crop insurance has changed dramatically over the last 10 to 15 years, now protecting 294 million acres with crop insurance premiums running at about $10 billion. “That’s a liability of $110 billion of coverage for America’s farmers and ranchers,” noted Zacharias. “This is a private/public partnership and on both sides of the equation, the companies involved have a fiduciary responsibility to their shareholders and with the public sector,” he added.
Zacharias pointed out that the last few years have posed some real challenges to both farmers and crop insurance companies. “If you look over the last couple of years, we have faced some headwinds,” he said. “Take the situation in 2012 with the extensive drought we had in the Midwest. Last year, when we had the swing in prices and a lot of other revenue policies kicked in, so there were indemnities paid there.”
Zacharias also explained that in order for crop insurance to remain strong, it must remain viable to the private sector. “It is important for the private sector to remain viable. If you look at where this Farm Bill has taken us, the availability for farmers to have different risk management options, affordability of that part of the program remains very much intact. We need both farmers and insurers to see reasonable returns in this business to help manage the risk.”
Zacharias said the 2014 Farm Bill has maximized choices for the farmer. “With that choice, comes great responsibility,” he added. He noted that there are many Title I provisions that farmers needs to be aware of so they can purchase the protection they need. That, of course, is where the industry’s 12,000 agents come into play. “They will need to go out and seek the expertise of both the crop insurance agency force as well as those folks in extension and farm managers who are grinding through the Title I Component,” he added.
Read the full transcript of the interview here.