Organizations Come Together To Call On Congress To Keep Crop Insurance Strong

March 12, 2013

As lawmakers debate the next Farm Bill, more than 40 commodity groups, lending organizations, input suppliers and other stakeholders are calling on Congress to oppose to any changes to crop insurance that would discourage producer participation in insurance or undermine private sector delivery of insurance products.

“In agriculture, one thing is for certain: crop loss will occur in some part of the United States each year. The significant, widespread crop losses of 2011 and 2012 have clearly demonstrated the need for crop insurance protection and the public-private partnership of program delivery. Farmers,ranchers, their lenders, input suppliers and other stakeholders agree that crop insurance protection should remain a viable, affordable tool for managing risk,” stated the organizations in a lettersent to House and Senate Agriculture Committee members.

Prior to the emergence of crop insurance as farmers’ primary risk management tool, rural America largely depended on unbudgeted ad hoc disaster bills to counter the effects of hurricanes, floods, droughts and other natural disasters. Unlike crop insurance, which is partially funded through farmer premiums and insurance company losses, taxpayers paid for all of ad hoc disaster spending.

The letter noted that current crop insurance is a preferred method of assistance because policies are selected in advance and tailored to the individual producer, whereas after-the-fact ad hoc disaster assistance may help a producer survive a disaster but does not help manage risk.

“Federal crop insurance provides an effective risk management tool to farmers and ranchers of all sizes when they are facing losses beyond their control, reduces taxpayer risk exposure, makes hedging possible to help mitigate market volatility, and provides lenders with greater certainty that loans made to producers will be repaid,” the letter states.

Given the success of crop insurance to help mitigate losses during last year’s historic drought, crop insurance supporters hope lawmakers will keep the program intact for the future.

“After a very challenging 2012 crop year, and with increasing demands for food, fiber, feed and fuel worldwide, it makes little sense to reverse the great progress Congress has made in providing crop insurance protection to producers,” the letter concluded.

Those signing the letter include the American Farm Bureau Federation, National Farmers Union, National Cotton Council, Southwest Council of Agribusiness, National Association of Wheat Growers, the sugarbeet industry, and more.