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For beginning farmers, having this protection is especially important. Many young farmers rely on banks for operating loans. And banks won’t make these loans without assurance that farmers would have a way to pay it back if Mother Nature strikes.
I hope Congress remembers in the next farm bill that crop insurance is not only necessary for rural America, but that ultimately it protects the consumer. Without it, we would not be able to provide a safe, reliable and affordable food supply for America and the rest of the world.
Farm policy critics would do well to remember that every American consumer relies on agriculture. We all want healthy, fresh food for our families. We also want affordable food. In today’s difficult farm economy, crop insurance provides an important measure of stability.
As Congress starts debate over the next Farm Bill, which sets out rules for crop insurance, I would like policymakers to remember this program is the only thing standing between bankruptcy and the ability to plant again for many Maryland growers. And they should appreciate that crop insurance is not a handout.
Premiums are more affordable for farmers through a government discount. Insurance products have expanded to include more crops across the country. Both of these factors have increased participation and broadened the risk pool, which makes the program more actuarially sound.
Our policymakers often agree that coverage for natural disasters like wind, hail and drought are critical and appropriate. But the debate often focuses on whether revenue coverage is really needed. I can assure you this product has become a critical tool that is equally as important as the amazing technological advancements that have made our farms the most efficient and productive in the world.
Right now, Washington think tanks are launching an inexplicable attack on crop insurance in an effort to dismantle the program by trying to portray it as a giveaway to farmers and as a tool that only benefits large, established farmers.
Sometimes folks are quick to criticize crop insurance because they don’t realize that, like agriculture, the program touches every state in the nation. It has proven itself to be our most effective risk-management tool.
Unfortunately, some critics of farm policy want to upend the whole system by capping insurance discounts or even excluding larger — and less risky — farms altogether. It makes for an easy talking point, but it would carry unintended consequences. By removing your most established farms, and all the acreage associated with those farms, you are doing the same thing as excluding the healthiest people from life insurance.
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.