Farmers Take to the Opinion Pages To Explain Why They Need Crop Insurance

May 19, 2015

In the midst of the spring planting season, a couple of farmers took to the opinion pages over the weekend to explain the importance of their primary risk management tool: crop insurance.

One farmer from Texas explained that it’s critical for young farmers just starting an operation. In the editorial, he writes that beginning farmers are the most vulnerable because they are more leveraged than established producers.

“They can’t afford a major hit in their finances or a year without any income. Just look at my state of Texas where we have suffered a historic drought for the last five years. 2012 and 2013 were particularly bad. Without crop insurance, this sustained drought would have wiped out an entire generation of farmers.”

Meanwhile, another farmer from Oklahoma laments the relentless calls in Congress for more cuts to the farm safety net despite significant cuts already shouldered by farmers in the 2014 Farm Bill.

“The key to crop insurance’s success has been its affordability, its availability and its viability… It would not serve anyone to cut these risk management tools to farmers, as they allow farmers to concentrate on producing higher-yielding, better-quality crops that reduce the costs to the consumer.”

The full editorials are printed and linked below:

Why Farmers Need This Program
Corpus Christi Caller-Times
By: Matt Huie

I always knew I was going to be a farmer. I grew up learning from my grandfather who turned me loose and gave me a lot of responsibility on his farm from a young age. I was driving machinery by the time I was 10 years old and running my own harvest crew by the time I was 14.

When I was in school, I entertained being a veterinarian and farming on the side mainly because people told me it was a tough life and I wouldn’t be able to make a living.

That kind of talk only made me more determined, so when I came home from college I started farming full time despite the fact that I barely had a dollar to my name and farming is a capital-intensive business.

I remember the first time I went to borrow money, my banker asked me right off if I had crop insurance and how much was the coverage. I was prepared to answer those questions, as crop insurance was then, and remains today, my primary risk management tool. I wouldn’t think of trying to grow a crop without it.

It’s essential – especially for young farmers, like I was at the time, just starting an operation.

It enables farmers to get financing and also enables them to survive a major catastrophic weather event.

Young farmers are particularly vulnerable to such risks because they are more leveraged than more established farmers. They can’t afford a major hit in their finances or a year without any income.

Just look at my state of Texas where we have suffered a historic drought for the last five years. 2012 and 2013 were particularly bad.

Without crop insurance, this sustained drought would have wiped out an entire generation of farmers. They would not have had the means to make it to another year without something to at least help cover part of the losses.

That’s why it is critical that crop insurance remain affordable and widely available. Thankfully the 2014 Farm Bill strengthened crop insurance and added provisions to help beginning farmers. But, the critics of farm policy, including some lawmakers in Congress, never seem to rest and are already clamoring once again for cuts.

They would be wise to take note of an alarming trend that puts the average age of a U.S. farmer at 58. Moreover, in 2012, the number of beginning farmers – those operating fewer than 10 years – was down 20 percent from 2007.

My desire to farm at such a young age is the exception, not the rule. Many young people can’t stomach the risk that is involved and have no desire to try.

Cuts to the farm safety net only make an inherently risky business, riskier. The expense of raising crops, the perils of weather-related disasters, and the low returns on investment, are enough to make anyone run in the other, more secure direction.

Now is not the time to create barriers at the starting point of farming and ranching. Now is the time to give certainty to young people with farm policy they can afford and count on.

Matt Huie farms cotton, corn, sorghum, and livestock in Southeast Texas near Corpus Christi.

 


 

Affordable Crop Insurance is Critical
The Oklahoman
By: Kelly Horton

I started farming and ranching with my father and grandfather in southwest Oklahoma and the Texas panhandle 40 years ago, and I am the fourth generation to farm cotton, peanuts, wheat, corn, milo and cattle on our family’s land.

I was 17 when I started farming on my own, and although I have four decades of experience under my belt, the many issues we face today on the family farm – worked by me, my son, my brother-in-law and my son-in-law – are no less challenging than they were when I began. In most careers, things get easier as you move along. In farming, since the weather and prices are so unpredictable, it really never gets easier.

With few risk management tools available in the early days, it could take years to recover from a hailstorm, an early freeze or any of the many other natural perils that could be thrown at you. When I first learned of crop insurance, I didn’t purchase it because premiums were unaffordable and margins were too slim to afford it. Thankfully, Congress made crop insurance more available and affordable – by partially discounting the premium – and now I wouldn’t farm without it.

Since the passage of the 2014 Farm Bill, crop insurance is the best tool farmers have to manage risks and revenue. It’s not cheap, but it is something that we budget for annually and can’t imagine not having.

The key to crop insurance’s success has been its affordability, its availability and its viability. Last year, farmers spent nearly $4 billion on crop insurance policies that protected 90 percent of planted cropland in the United States. I’d bet that many of the farmers in our area wouldn’t be surviving the current drought – which started in 2011 – if it wasn’t for crop insurance.

Despite the fact that agriculture’s safety net programs took a huge cut in the last farm bill, some in Congress seem to think we need to give more. I wonder if some of those people have any idea where their food and clothes come from or what it takes to get it from the farm to their plate or closet.

It seems almost daily that someone in Congress is proposing a bill to cut the premium support on crop insurance. It would not serve anyone to cut these risk management tools to farmers, as they allow farmers to concentrate on producing higher-yielding, better-quality crops that reduce the costs to the consumer.

Crop insurance is not a gift but insurance, just like homeowner’s insurance, that farmers buy. And like homeowner’s insurance, we don’t collect a dime without a verifiable loss and paying a deductible. Without crop insurance, many farmers couldn’t get financed and it would be almost impossible for a beginning farmer to get started.

Crop insurance is critical in meeting these challenges, and guarantees the American consumer a safe, affordable supply of quality food and fiber that is unsurpassed anywhere in the world.

Kelly Horton is a farmer from Hollis, Oklahoma.