Risk Management Discussion Shines Spotlight on Crop Insurance
“I can honestly say I would not be sitting here if it was not for crop insurance,” wheat grower Nicole Berg recently told an audience in Washington, DC.
Last year, Berg turned to crop insurance when she was only able to harvest a third of her farm due to drought and arid conditions. Crop insurance provided a vital safety net.
Preserving and strengthening that safety net for all farm producers was a key topic at the annual Ag & Food Policy Summit, hosted by Agri-Pulse. Berg, who is President of the National Association of Wheat Growers, spoke on a panel that focused on managing risks and crop losses on the farm.
“All farmers want to do is stay in business another year,” she said.
The Ag & Food Policy Summit brought together policymakers, farm leaders, and commodity experts for policy discussions that will help shape the 2023 Farm Bill. Crop insurance is expected to remain farmers’ number one risk management tool.
“Our farmers say: crop insurance is a cornerstone of the Farm Bill. Don’t mess with it, just make it better,” said Zippy Duvall, president of the American Farm Bureau Federation.
Duvall noted that the Farm Bill should reflect the importance of farmers to our national security. That means protecting the farmers who maintain our abundant food supply. Unlike ad hoc disaster programs, which can sometimes take years to deliver assistance, arriving too late to save the family farm after disaster, crop insurance can provide timely assistance to farmers who face unforeseen challenges.
The strengths of crop insurance have made it the ideal risk management tool, said Tom Zacharias, President of National Crop Insurance Services.
- Its public-private partnership increases efficiency and strengthens program integrity;
- Its adaptability allows crop insurance to adjust for future risks;
- Risks and costs are shared between taxpayers, insurers and the government, and;
- Farmers receive help in just days or weeks, allowing them to count on the predictability of crop insurance to deliver assistance when they need it most.
America’s farmers overwhelmingly trust crop insurance to help them manage their risks. Today, crop insurance provides protection for more than 130 different commodities and covers farmers in all 50 states. Last year, crop insurance insured a record 462 million acres, providing $137 billion dollars in protection. That’s more than 90 percent of major crop insurable farmland in America.
Still, crop insurers and the U.S. Department of Agriculture’s (USDA) Risk Management Agency are continually working together to improve crop insurance to better protect farmers. In the next Farm Bill, that will mean giving USDA the tools it needs to expand affordable coverage for specialty crop producers.
“Roughly $90 billion a year in specialty crops are planted in the United States, and about $19-20 billion of those specialty crops are covered by crop insurance. The delta is not small, but it has been closing, and that’s a positive,” said Kam Quarles, CEO of the National Potato Council and a member of the Specialty Crop Farm Bill Alliance.
Quarles noted that there are more than 300 specialty crops, and each is grown differently, requiring USDA to analyze a significant amount of data. “It has an impact on how those products are priced, how they’re constructed. That’s an ongoing discussion as we look at this Farm Bill: how do we sit down with USDA and the industry, develop better data to make more affordable, useful products,” Quarles said.
As Congress considers next year’s Farm Bill, leaders encouraged farmers to speak out about how crop insurance gives farmers the certainty they need to keep farming.