Cuts to the farm safety net jeopardize a national asset

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“When the well’s dry, we shall know the worth of water,” said Benjamin Franklin.

Similarly, if ever we lose the hard-working independent family farms that take care of the nation’s landscape while producing a diverse set of crops more reliably and efficiently than any farm sector in history, then, and only then will we truly understand the value they provide.

I, for one, hope we as a nation never get to that point and I will work every day on behalf of agricultural producers to prevent such a scenario. But, it’s a challenge for a number of reasons; chief among them is we take our secure, affordable, national food supply for granted. It’s always been there, it always will be.

To be sure, the “well” that is the American farmer is not going dry, but here are some reasons why we should make certain that the policies we embrace don’t put our farmers in danger.

First, the demographics are not on our side. The number of farmers continues to decline and the age of farmers continues to increase. These numbers speak to a way of life that is hard and seems to grow harder by the day.

Second, the business of farming is getting ugly. The Secretary of Agriculture is forecasting a 32 percent decline in net farm income from 2014 to 2015 and lower commodity prices for the foreseeable future.

Third, when farmers aren’t dealing with the vagaries of Mother Nature and falling commodity prices, then they’re worried about the constant threat of new regulatory burdens. Just consider recent activity in Washington: the Environmental Protection Agency finalized a rule that some have labeled the biggest land grab in the history of the U.S. causing every ditch across rural America to be regulated as a major waterway. Farmers and ranchers will endure the brunt of this new regulation as the primary stewards of land resources in the U.S.

Finally, to add to this political risk and uncertainty, some lawmakers are trying to use the appropriations process to threaten farm policy one year into the 2014 Farm Bill. This is after the farm safety net has already borne dramatic cuts over the last decade in an effort to reduce our national deficit.

Crop Insurance was the primary target. And, while the efforts were rightly rejected, they could have brought an agricultural sector that is already suffering to its knees. Farmers purchase crop insurance to protect against losses due to natural disasters. They only receive an indemnity after suffering a verifiable loss and paying their deductible. Crop insurance enables farmers to rebound quickly after a disaster and it prevents dramatic farm losses, which in turn allows them to pay credit obligations and fixed expenses.

This system is hugely important for not only farmers, but also to rural communities and the national economy as a whole. Agriculture accounts for nearly $800 billion in economic activity and supports one out of every 11 jobs in the economy. Cutting the farm safety net would serve to reduce farm financial protection and drive independent American farm families out of business.

Meanwhile, our foreign competitors seem more than ready to move the U.S. out of the agriculture business as they ramp up support for their own farmers. As Texas Tech University’s Darren Hudson recently told a Congressional committee, “Other countries are treating their agricultural sectors as a national asset for security purposes and for the U.S. not to consider the implications of those choices would leave us at a competitive disadvantage.”

Indeed, it would be a tragic commentary if years from now – having squandered our own national asset because we didn’t fully appreciate its worth – we look back and remember what we had and lost.

About the author: Tim Lust is the CEO of the National Sorghum Producers.

Crop insurance literally saved my Mississippi farm

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As a fourth generation Mississippi farmer, I grew up knowing that I worked in a field full of risks. When the weather cooperates, prices dive. When prices are great, foreign markets collapse, sending prices into a sudden nosedive. It’s always something.

However, it wasn’t until I actually set out on my own in farming in 2011 that I fully understood just how financially exposed farmers are when they put a crop in the ground. That year, I had to borrow roughly $2.5 million to put 3,500 acres of mostly corn into the ground, fully knowing the financial consequences if things went awry.

Just as luck would have it, my crop insurance agent talked me into buying enough coverage that year to cover a loss – up to 85 percent of my crop – that was simply unimaginable to me. I wrote that $60,000 check knowing purchasing my crop insurance policy that year certain that I was buying coverage for a catastrophe that would never happen. And then it happened. And that’s the moment I realized that for me, crop insurance is not only essential, it’s the only reason I’m still in business today.

The concern that I had about what had become the drought of 2011 after I planted my crop quickly morphed into a lump in my throat as torrential rains came to the Mississippi delta and the local river spilled over its banks. Before I knew it, the levees had failed and the Yazoo River was knocking on my front door, flooding nearly my entire farm.

Crop insurance is a public-private partnership whereby individual farmers purchase policies out of their own back pockets for insurance that is specifically tailored for their tolerance to risk and the profile of their farm. Crop insurance is affordable to farmers, thankfully, because the federal government provides a discount, ensuring that all farmers, young and old, big and small, can purchase policies if they choose to.

Farmers buy crop insurance for the same reason drivers purchase auto insurance: because it gives you some degree of stability in times of disaster. If you wreck your car, your car insurance will replace it and you can go to work the next day. Why wouldn’t we as a nation also want to have an insurance policy on our food supply, since that, after all, is the most important thing we have?

Prior to the rise of modern day crop insurance, the wide-scale disaster that we experienced in 2011 would have necessitated a very expensive, ad hoc disaster bill from Congress. While anything is better than nothing when you literally lose the farm, those disaster funds usually took a year or more to actually land in the hands of the farmers who needed the help. A year or two is often just too late for some farmers, particularly young and beginning farmers.

Crop insurance, on the other hand, is administered by private insurance companies and help arrives in weeks or a month or two, not years later. In my case, as my farm was literally underwater, my crop insurance agent, the adjuster and the their supervisor were on site to get things moving for me.

In 2014, crop insurance covered nearly 90 percent of planted farmland in the U.S., costing farmers roughly $3.8 billion out of their own back pockets. Those policies protected 128 different crops including nearly all major commodities and a long list of specialty crops including apricots, bananas, blueberries, cherries, coffee, olives and tangerines.

Needless to say, if I hadn’t purchased crop insurance that first year I struck out on my own, I would be doing something else other than what I love and do best, which is farming. And me, my wife and kids would be spending the rest of our lives paying the bank back for that first production loan I borrowed. Don’t let anyone tell you anything differently: Affordable, available and viable crop insurance is essential for a healthy farm sector and plentiful, domestic food supply.

John Michael Pillow is a farmer from Yazoo City, Mississippi.