#ICYMI: Crop insurance helps multi-generational farm weather the ‘perfect storm’

February 14, 2017

By: Nicole Berg
Published in the Tri-City Herald
February 14, 2017

My family, which farms 21,000 acres of wheat, alfalfa and vegetables in Benton County, often jokes that our great-grandfather Lenzie Berg should have perhaps thought twice before he decided to stake his claim in one of the driest regions west of the Mississippi. We are kidding, of course — we wouldn’t have it any other way.

Farming is a way of life for the Berg family. It is in our blood, so much so that my brothers and I came back home to help our father on the farm after we completed our educations. We know farming isn’t something we will ever get rich doing, at least not in the fiscal sense, but we take great pride in the role we play in feeding and clothing our growing world. You do, however, have to get creative when you are farming in an area that, on average, only gets seven inches of rain a year. Our conversion from dryland to irrigated farming, for example, was by no means an easy or inexpensive undertaking, but essential to preserving our family farm for the next generation.

Year after year, we apply the real-life lessons passed down by our father and grandfather, our own unique expertise and lots of old-fashioned sweat and tears to the task before us — producing a bountiful harvest. But sometimes, that task can be insurmountable, no matter the level of education, experience and resiliency. Farming just isn’t like other businesses out there. There are a number of factors out of our control — and at the top of that list is Mother Nature. As most of us are painfully aware, we have experienced a historic drought here in Washington over the past three years, and farmers have been fighting an uphill battle every step of the way. In addition to the beating we have taken by Mother Nature, commodity prices, which are also out of our hands, are about half of what they were a few years ago.

Meanwhile, the cost of farming just continues to go up. In short, we have faced a “perfect storm” of challenges that would have, quite frankly, forced us to close our doors had we not purchased crop insurance. Crop insurance — a unique public-private partnership that is the cornerstone of the farm safety net — is something we purchase every year. It operates in a very similar way as other insurance policies. We pay a premium to an insurance company based on the value of our property, and anticipated risk, to insure its worth. If the property is damaged, we take a hit for a portion of the loss and the insurance company covers the remainder through an indemnity payment.

Farmers collectively pay between $3.5 billion and $4 billion a year out of our own pockets in premiums. And we absorb hefty deductibles (on average, 25 percent of loss). As is the case with other insurance policies, we purchase crop insurance in the hope that we never have to use it. And, when disaster strikes, we use the policy to pay our bills. It isn’t close to what we would collect from a healthy crop, but it allows us to keep farming. Crop insurance also eases the burden on taxpayers. Prior to the emergence of crop insurance as the top risk management tool for farmers, natural disasters regularly resulted in very expensive, unbudgeted disaster bills from Congress.

Thankfully, those days are behind us. As we begin negotiations around a new Farm Bill, I for one will be an outspoken advocate for crop insurance. It is not just an “insurance policy” for farmers, but also an “insurance policy” against disruption and financial instability in the food production sector, which could have widespread negative repercussions affecting every American. I encourage anyone who prioritizes a safe, stable and affordable food supply to join me.

Nicole Berg is a partner in Berg Farms of Paterson.