In America, approximately 220,000 farming and ranching families raise 80 percent of the crops and livestock that feed and clothe our nation. All 330 million of us.
“That is a very big task for a very small group of people,” crop insurance agent Joanie Grimes recently told Farm Policy Facts on our Groundwork podcast
It’s a task that comes with big risks, too. Joanie, an agent with the Auburn Agency in Ohio and a board member of the Crop Insurance Professionals Association (CIPA), joined Groundwork to talk about the challenges facing farmers today – and how crop insurance is a vital component of the farm safety net that protects them.
Crop insurance protects our family farmers, it protects our supply of food, fiber, and fuel, and it helps protect the rural economies and communities that depend on agriculture. But how does it work?
Crop insurance is a risk-management tool, based on a partnership between the federal government and private-sector insurance companies and agents. Farmers analyze the risks on their farm before working with an agent to purchase a crop insurance policy tailored to their specific needs. It’s a dynamic program that allows farmers to choose policies based on the level of protection they need.
“It is based on their production; it is based on what happens on their farm. Not what happens on their neighbor’s farm. Not what happens three states away. It is tailored for their actual operations,” Joanie explained.
Agents play an important role in this process, working closely with each farmer to look at the various risk factors that could affect the success of that year’s crop or the financial standing of their farming operation.
“We, as agents, are privileged to work with producers of all ages, sizes and levels, that is what makes it so intriguing,” Joanie said.
Crop insurance requires that farmers purchase a policy prior to planting the crop, and then, if they file a claim, farmers must pay a deductible ranging from five percent to up to 50 percent of the farm’s losses before receiving an insurance payment. Last year, farmers paid $5 billion just to purchase crop insurance – that doesn’t count the amount they paid in deductibles.
It’s a big investment for most farmers, but well worth it. That’s because farming is a high-risk endeavor with extremely low margins.
Having crop insurance means that if farmers “are dealt a bad year from Mother Nature, or some other catastrophe, that they can be able to go ahead and farm the following year and not be at risk of bankruptcy or foreclosure.”
This season, Joanie says that the farmers she serves are facing several big challenges.
“We are concerned with inputs, we’re concerned with the commodity prices and, as always, weather is a challenge because Mother Nature never deals us the same cards twice,” she said.
Of course, maintaining a farm safety net is critical to protecting our abundant supply of food and fiber – a privilege that we must not take for granted as other countries face war and famine – but it also has ripple effects throughout our economy.
Joanie notes that farmers drive the economy in their communities, whether they’re spending money at the auto parts store on the corner or grabbing breakfast at the local coffee shop. Weakening or undermining the crop insurance program would have a devastating effect on these small businesses and rural Main Streets throughout the country.
For Joanie, it is also a personal point of pride to be able to serve farmers as a crop insurance agent.
“It is such a joy for me to able to work with all of my producers… and know that I’m trying to do my part to make sure that they are being able to be profitable and being able to pass it down to their families,” she said.
Thank you to all of America’s crop insurance agents, and everyone else working in the crop insurance industry, for the work that you do to protect our farmers and their livelihoods.