Rep. Peterson: Standing Up for Crop Insurance
Editor’s note: Farm Policy Facts is pleased to publish a guest editorial from U.S. Representative Collin Peterson of Minnesota that addresses the importance of maintaining a safety net for farmers. In particular, making certain crop insurance remains affordable, widely available, and viable. Rep. Peterson was one of the principal negotiators of the 2014 Farm Bill and we applaud his efforts in standing up for American farmers and ranchers.
By Representative Collin Peterson
It took nearly four years but Congress passed a new farm bill in 2014. Among its many provisions the 2014 Farm Bill provides a strong safety net for producers – one that provides assistance in times of need, providing relief during times of low commodity prices, high input costs or weather-related disasters. Crop insurance is the cornerstone of the farm bill’s safety net and our job now is to make sure we don’t do anything to mess it up.
Across the country, 290 million acres of farmland are covered by crop insurance. Policies are available for an impressive and wide variety of crops and production methods. Producers choose the level and type of coverage purchased from private crop insurance companies in order to adequately protect against risk. The federal government pays part of the insurance premium to reduce the cost to farmers and offset some of the operating and administrative costs of the private insurance company. This structure allows farmers, insurers and the government to share in the risk of production agriculture.
Crop insurance is a unique public-private partnership with very effective program delivery, something other federal programs should aspire to. By combining the nationwide approach of a federal program with the personalized service that comes from working with private crop insurance companies, risk management programs for farmers have been successful.
Unfortunately many members of Congress, whether they come from urban districts and think food magically appears on grocery shelves or are so ideologically determined to make spending cuts, have taken aim at farm bill programs either through the farm bill reauthorization or during consideration of annual spending bills. We have had similar arguments in past farm or appropriations bills but each time it gets much more difficult to beat back attempts to cut farm bill programs.
It is not easy to get into farming. Agriculture is capital-intensive and risky, with a year’s yields dependent on the will of Mother Nature. The crop insurance program is not just a safety net for farmers, but to their local bankers who provide the credit necessary to produce a crop.
Quite simply, crop insurance is what keeps farms both big and small in business.
Crop insurance also allows the next generation of farmers to start their operations, something we encourage in the 2014 Farm Bill by providing reduced premiums to beginning, veteran and socially disadvantaged farmers.
Without crop insurance only the big farms, those with deep pockets who can take the risk and have enough cash to self-insure, will be able to stay in business. Fewer farmers is not good for American agriculture.
If crop insurance opponents get their way, I fear that the crop insurance business will crumble as companies will simply get out of providing this popular and important product. This is why we must stand united and strong. This is why we must remain vigilant against waste, fraud and abuse in the program; just one bad actor can reflect poorly on the entire program. It is also why we must look to expand crop insurance availability to more crops, something outlined by the farm bill. Having more program participants will strengthen the overall crop insurance program and increase political support in Congress.
I will continue to be a strong supporter of America’s farmers and the crop insurance program.
Rep. Collin Peterson represents the 7th District of Minnesota and is the ranking member of the House Committee on Agriculture.