Greg Schwarz: We all rely on the farm safety net

June 13, 2011

The weather has been so wild and so unpredictable this year that it’s not just farmers who are complaining about it. Here in the Corn Belt, it’s been cold and damp for so long that it took us forever to get our crop in.

Parts of the Southwest wheat belt are parched, while millions of acres in the vast Mississippi Delta region are underwater.

But being subjected to the unforgiving whims of Mother Nature is a central aspect of being a farmer.

Decades ago, our elected leaders recognized this fact and decided that in order to have a safe and ample food supply, we needed to have farm safety net policies in place to ensure that unpredictable weather doesn’t knock America’s farmers out of business and leave the country short on food.

It’s the future of a key aspect of the farm safety net — crop insurance — and whether or not it will be viable after the upcoming federal budget cuts, that keeps me awake at night. As a business owner, I understand the importance of balancing a budget, and I hope Congress does, too.

But if Congress eviscerates crop insurance or other farm policies that are but a dot on the federal budget but are so important to our unique sector of the economy (“Farming: Of equity and evolution,” June 2), then all Americans and a rapidly expanding global population would feel the pinch.

Crop insurance is an example of a federal program that provides a tremendous amount of benefit per dollar of federal investment.

For example, in 2010, for a relatively small federal outlay combined with private monies from the farmers who purchased the policies, the government was able to leverage a $4 billion investment into an astounding $80 billion in liability coverage for America’s food, feed and clothing crops.

That’s a $20 return on every dollar invested.

This amplification is possible because crop insurance combines the best of government and private sector to help protect farmers from adversity — promoting a safe, affordable, ample food supply for our citizens and for the world.

The government helps farmers underwrite a portion of their premiums to make crop insurance more affordable, and the private sector provides the policies and coverage that kick in when needed.

So if disaster strikes — whether in the form of floods or free-falling grain markets — crop insurance means that farmers aren’t thrown to the wolves and that they live to provide food, fiber and energy for this country yet another day.

This security helps farmers farm better and is a fundamental reason why America has the most dynamic agricultural sector in the world. The modern crop insurance model is a great example of the ability of the public and private sectors to partner, harmonizing their efforts and increasing their benefits.

And crop insurance is very popular among farmers nationally. In fact, more than 1.1 million policies covering 256 million acres across the country were written in 2010 to deal with risks.

And when you consider that the agricultural sector produces the food that we eat, the ethanol that we use as fuel for transportation and is a significant economic engine in the United States, it seems that it might be worth protecting.

Now I understand that when Congress starts trimming the budget, everyone is going to argue that their specific program deserves protection. While I can’t speak for other aspects of federal spending, I can attest to the fact that crop insurance and other aspects of farm policy work for me.

Without a doubt, they are the policies that keep family farms like mine in business and our nation food secure.

It is important to note that nearly $12.45 billion total has already been cut from crop insurance in the last several years. That’s sobering news for a farmer like me, because I know how much I need crop insurance to protect myself from disaster and how important it is for farmers to have crop insurance to secure a loan.

Agriculture is one of the only industries to have already made big sacrifices to help trim budgets. And, there isn’t much left to cut — farm policies account for less than one-quarter of one percent of federal spending.

Further reductions will only weaken our country’s food supplies and punish our state’s workforce — one-fourth of which depends on agriculture for jobs.

The United States needs to be put back on firm financial footing. But sacrificing food security and one of the economy’s lone bright spots is not the best path to get there. We’ll all sleep better knowing there will be food on the table tomorrow.

About the author: Greg Schwarz is the president of the Minnesota Corn Growers Association and a third-generation Minnesota farmer who raises corn, soybeans and turkeys in Le Sueur County.

This article first appeared in the Minneapolis Star Tribune on June 13, 2011.