The Essential Strengths of Crop Insurance

Crop insurance helps make America’s farmers and ranchers world leaders in agriculture, allowing them to stay competitive and be more innovative. It also helps them sleep better at night knowing that, should the unexpected happen, they will have the financial security to stay in business.

In short, crop insurance keeps America growing.

Here are six reasons why crop insurance is an essential tool for America’s farmers and ranchers:

Provides an Individualized Risk Management Solution

Unlike many other farm programs, crop insurance is not a one-size-fits-all product. Instead, protection is personalized to fit an individual farmer’s risk management needs while considering the type of coverage needed and the crops being grown. There are 13 private-sector crop insurance companies that deliver crop insurance, all driven by competition to meet farmers’ needs.

From the Farm: “I love crop insurance. It works great for our farm… The fact that it’s individualized, its reactive… It’s fantastic.” – Eli Dean, Ohio Organic Farmer

Strengthens American Food Security

Every American relies on farmers to provide a secure food supply, and family farmers depend on crop insurance to keep growing after disaster. Crop insurance also gives farmers the confidence to make long-term investments in the health of their farm and in efficient production methods that support the health of the planet.

From the Farm: “An effective safety net is vital. It should give us farmers confidence to put out a crop and know that we can keep the lights on when hard times hit.” – Caleb Ragland, Kentucky Soybean Grower

Requires Farmers to Share in the Risk

Crop insurance requires farmers to invest in their own protection and share in the risk. Last year, America’s farmers collectively paid $6.8 billion to purchase crop insurance premiums and shouldered losses through deductibles. The government discounts crop insurance premiums to make crop insurance affordable.

From the Farm: “We must continue to have an affordable crop insurance program. With input costs higher in every area of my operation, I cannot afford to have the crop insurance premium [discount] reduced in this next Farm Bill.”  – Jake Isley, Michigan Soybean Grower

Adapts to the Changing Climate

As farmers face increasing challenges due to climate change, the safety net provided by crop insurance is their first line of defense. Crop insurance not only works to protect farmers when disaster strikes, but it also complements efforts to incentivize the voluntary adoption of climate-smart farming practices and can be quickly adjusted to meet the changing needs to farmers.

From the Farm: “The safety net provided by crop insurance is vital to maintaining the agriculture industry in this country, especially in the face of increasingly unpredictable disasters like droughts, floods and extreme weather.” – Allyson Maxwell, Michigan Corn, Sugarbeet, Soybean and Wheat Farmer

Delivers Aid Quickly to Keep America Growing

The public-private partnership between the Federal government and private crop insurers increases efficiency and ensures that aid is delivered quickly — often within 30 days of a finalized claim. Following a weather disaster, private-sector claims adjusters quickly and accurately assess damages and calculate losses. Delivering aid based on actual losses protects farmers, ranchers, and taxpayers alike.

From the Farm: “Mostly I want a tool that I can rely on and plan around, rather than a program of ad hoc relief or a legislative fix. It’s a guaranteed safety net I can count on without congressional intervention.” – Marc Arnusch, Colorado Grain Farmer

Helps Farmers Secure Credit

Farming is not only risky, but it is capital-intensive. Many farmers must take out operating loans to have the financial means to plant a crop, and most lenders require that farmers have crop insurance. Having access to affordable crop insurance is particularly critical for young and beginning farmers who do not have access to substantial capital and must rely on credit.

From the Farm:
“Anybody you bank with now, they’re going to ask if you have crop insurance and at what level, because that makes you bankable to them—they want protection just like you want and need protection.” – Zac Harris, Oklahoma Farmer