In just about every walk of life, we look for ways to manage risk. Insurance protection is available to protect our families, our health, our homes, our vehicles. It only makes sense that insurance protection should be available to help farmers and ranchers produce something that everyone must have to survive: the nation’s food supply.
Unfortunately there are critics who like to complain with their mouths full, not thinking for a minute about where their food comes from. They criticize farmers and ranchers for being too successful, too wealthy or too big, and believe the nation’s fiscal challenges should be balanced on their backs. But these attacks on crop insurance are direct hits to our rural economy and ultimately would take food off of the table.
U.S. farmers and ranchers provide food, feed, fuel and fiber to families across this country – regardless of size or income level. Shouldn’t we provide them access to crop insurance in the same manner? Drought, hurricane, tornado, flood – no matter the region or crop, unpredictable weather conditions impact every farmer and rancher, and therefore every single American, in some way. The problem is most people don’t realize the impact that crop insurance has on their lives.
Our nation’s farmers produce different crops, using different techniques, with unique risks. But House Agriculture Committee Chairman Frank Lucas recently made one important point: “despite these differences, our farmers have at least one thing in common: a belief that crop insurance is a vital risk management tool that must be preserved.”
Recognizing that crop insurance is key both to food security and the financial stability of rural America, the House and Senate Agriculture Committees crafted provisions to strengthen and enhance crop insurance. With over 282 million acres protected at a minimal cost, crop insurance is a sound investment for consumers, farmers and taxpayers. Over 20,000 jobs are tied directly to crop insurance, but the reach is much broader: one study found crop insurance saved 20,900 off-farm jobs and generated $2.2 billion in off-farm economic impact in four states alone.
As with other lines of insurance, crop insurance is a product selected in advance and tailored to the individual producer’s needs. Senate Agriculture Committee Chairwoman Debbie Stabenow put it well: “crop insurance is insurance, and the farmer gets a bill, not a check.” It also requires a broad pool of participants to function properly. Given its complexity, the private sector is well-suited to deliver products and indemnities in a timely manner.
Unfortunately, critics have filed short-sighted amendments that would return us to the days of 100% taxpayer-funded ad hoc crop disaster assistance and government delivery of crop insurance. In short, these amendments to impose means testing, cap premium support and cut private sector delivery create barriers to participation and jeopardize crop insurance protection, which is necessary for securing operating credit and producing our nation’s food supply.
An amendment by Representative Ron Kind and promoted by activist organizations sharply reduces the availability and affordability of crop insurance for farmers and ranchers and harms the rural economy. The Kind amendment will cause farmers and ranchers to reduce participation and result in greater financial disruption in agriculture. It increases the likelihood of greater government expense through costly ad hoc disaster bills, and it will result in increased premium rates for those smaller producers that remain in crop insurance. It also decimates the availability of insurance protection in high-risk states with a history of weather disasters.
The Kind amendment fails to recognize that USDA-approved private crop insurance providers are still adjusting to the cumulative effects of the more than $12 billion in legislative and administrative cuts to crop insurance since 2008, record claims in 2011 and2012, and USDA-mandated rating methodology changes.
An additional amendment by Representative Jim McGovern is similar to one that was soundly defeated in the Senate. The amendment restores funding cuts to SNAP (food stamps) by cutting crop insurance. The McGovern amendment targets specific crop insurance programs for elimination or reductions, including the Supplemental Coverage Option and the STAX program, and imposes cuts that severely threaten private sector delivery.
The transition away from traditional price and income support programs saves taxpayers $18 billion in the House Farm Bill and few tools remain to assist farmers and ranchers in managing the unique weather and market risks they face.
Crop insurance has emerged as the farm policy of the future. And it has become a rallying point. Fifty national and regional trade associations recently wrote Congress about the importance of crop insurance and their concerns regarding harmful amendments, many of which have been filed in the U.S. House of Representatives. These farm groups, lending organizations, input suppliers, processors, conservation groups, insurance and reinsurance organizations have clearly stated their support for crop insurance.
They know where the food on their plates comes from and you certainly won’t catch them complaining with their mouths full. For the sake of our farmers, and the future of our nation’s food supply, let’s hope Congress does, too.
Christy Seyfert is the Vice President of Federal Affairs for the Crop Insurance and Reinsurance Bureau.
For more information, visit www.FarmPolicyFacts.org.