Farm Credit and Crop Insurance Essential for Our Nation’s Farmers
It is planting season in south Texas right now and we are working long days and nights in the fields. As a third-generation farmer, if there is one lesson I have learned it is that when it comes to getting seed in the ground, time is of the essence.
As such, there’s not much that can tear me away from my farm this time of year. Recently, though, I traded my overalls and work boots for my best suit and tie and headed to Washington, D.C., to testify before Congress about an issue very dear to farmers like me — the importance of reliable financing and strong farm policies that reflect the unique challenges our nation’s farmers face.
For cotton farmers like me, this will be the fifth year of tough prices. We can’t control the markets any more than we can the weather, so we need a lender that works hard on our behalf even during the toughest of times. Thankfully, Farm Credit is that lender. Its most important mission, assigned by Congress more than 100 years ago, is to ensure that farmers like me have a consistent source of financing irrespective of economic swings or vagaries of the financial markets.
As I put together my farm operating plan for this year, I knew – just like thousands of other farmers around the nation know – that Farm Credit has the financial strength and strong desire to finance that plan and to help me succeed.
Equally critical to farmers, as Congress begins to work on the next Farm Bill, is protection of a strong and affordable federal crop insurance program. This program is key because it provides both farmers and our lenders some protection from many of the inherent risks involved in farming.
When it comes to obtaining credit, the vast majority of crop loans incorporate crop insurance in their operation plans, and coverage is a requirement for many loans. Without it, credit would be limited to those with the strongest balance sheets. Given the recent price trends and outlook for commodity prices, there just aren’t many farmers who fall into this category.
For beginning farmers, crop insurance is even more critical and often a prerequisite to getting operating loans to start farming. I am 64 years old, which is the average age of a farmer in the U.S. As baby boomers retire, we are relying on the next generation of farmers to follow in our footsteps. They will need crop insurance to do that.
But crop insurance doesn’t just support farmers. It benefits the broader rural economy as well. Insurance premiums that we pay out of our own pockets, which have tallied nearly $50 billion since 2000, help shield suppliers, processors and cooperatives, as well as our communities, from economic calamity after a disaster.
Last but certainly not least, taxpayers also benefit from a strong crop insurance program. Before we had crop insurance, the cost of natural disasters that destroyed our fields would fall to taxpayers as Congress approved ad hoc disaster assistance programs. This happened repeatedly before the widespread use and availability of crop insurance.
The current downswing in agriculture means the next Farm Bill will be more important than ever. American farmers are the most efficient in the world, but we need strong farm policies that give us the right tools, like reliable credit and a vibrant crop insurance program, in order to keep meeting our growing global food, fiber and energy needs.
Jimmy Dodson is the chairman of the Farm Credit Bank of Texas. He raises cotton, corn, wheat, hay and grain sorghum on his family farm near Corpus Christi.