Technology, Sustainability and Insurance Essential to Agriculture’s Future
Farmers and ranchers are tasked with producing more food and fiber than ever to meet the world’s growing appetite, and they have to do it while preserving scarce natural resources and dealing with extreme weather and volatile markets.
A combination of new technology, smarter farming practices, and government policies will be required to succeed, according to experts at a recent international agriculture summit held in Kansas City.
Don Preusser, executive vice president and chief marketing officer of Farmers Mutual Hail Insurance Company of Iowa, explained that the global agricultural sector is already evolving and altering the way the world farms.
“Agriculture is rapidly changing as operations become larger, more commercialized, technologically advanced, and vertically integrated,” he told hundreds of attendees of the International Association of Agricultural Production Insurers (AIAG) biennial conference.
“Precision agriculture is driving significant productivity and efficiencies gains, helping to grow and secure global food needs,” Preusser concluded. “And granular field level data combined with predicative analytics will soon create new insights and innovative risk management solutions.”
When it comes to risk management, no tool is as important for U.S. farmers as crop insurance. AIAG traveled to America for the first time ever so leaders from more than 30 countries could learn more about how the dynamic U.S. system operates.
Tom Zacharias, an AIAG board member and president of the Kansas-based National Crop Insurance Services, explained that the U.S. model is characterized by its unique private-public partnership and cost sharing. “U.S. crop insurance benefits from the efficiency of the private sector, comprised of companies, agents, claims adjusters, and reinsurers” he said. “Meanwhile, the government has made smart investments to keep policies affordable for farmers and widely available across a spectrum of crops and geographic locations.”
Zacharias also said that farmers bear a significant portion of the cost, which has had the desired effect of reducing taxpayer exposure to agricultural risk. “U.S. producers collectively spend $4 billion from their own pockets each year for crop insurance, and they shoulder losses through deductibles before receiving an indemnity,” he noted.
But none of it would have been possible, Zacharias said, without a commitment from U.S. policymakers in recent years. He hopes strong support will continue in the years to come and that America’s successes can provide a roadmap for insurers and farmers world-wide.