Keep crop insurance affordable and widely available

Although I grew up on a farm, I did not fully appreciate how precarious the business of farming was until I was a little older and thinking seriously about getting my own ground and starting my own operation. One incident, in particular, really put the value of risk management in perspective for me.

It was early summer and I was helping my dad build a new barn for our equipment. We started on a Friday and had plans to finish up by Monday, but later during the weekend a storm blew through the area with hail and strong winds; some even estimated that a small tornado was a part of the mix. That storm not only decimated our entire field of crops, but also shredded the barn to nothing. All of our hard work—in the field, on the barn—was for naught.

My family did not have a nest egg to cover the significant cost of the damages. In fact, we had fixed expenses and operating loans tied to those investments. If we had not purchased crop insurance, we would not have been able to recover from the loss of our crops. If we had not purchased another kind of insurance on the building, we would not have been able to recover the cost of replacing the barn.

In that single moment, I realized there are no guarantees and certainly not with farming. We operate at the will of Mother Nature. As a result, we have to do our part to minimize the risk as best as we can, so we can get back on our feet when a disaster strikes.

As my father and others of his generation have taught me, doing our part means taking a conservative and diverse approach to managing the farm. That includes being smart about purchases of equipment and inputs, developing a sound business planand also purchasing crop insurance each year.

Although crop insurance is a backup for all of the other measures taken to be successful, I can say with certainty I would not be able to operate without it. I am a young and beginning farmer with just six years under my belt. My bank would not approve an operating loan without proof of crop insurance. Frankly, after watching my father and neighbors sustain difficult losses, I would not want to think about farming without it.

While farmers must do their part to minimize the economic impact of a disaster, it is also important that policymakers in Washington, D.C. do theirs. This means ensuring federal crop insurance remains widely available and affordable for all farmers across the country, especially young ones like me.

It seems that task becomes more difficult when special interest groups distort the truth about the risks farmers face and especially about the cost and mechanics of the risk management tools in the farm bill that we use to survive the uncertainties and hardships of agricultural production. Right now, those 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 give away to farmers and as a tool that only benefits large, established farmers.

In reality, their efforts would only push me, and other young farmers like me, out of the program and out of business. We would not be able to afford crop insurance because the premiums would be too high. We would not be able to afford to farm because banks would consider us too great of a risk without some kind of assurance that we can pay our bills if a catastrophic event wipes out our crops.

This is important to remember as Congress begins the process of writing a new farm bill. With net farm income at one of its lowest points in decades and the average age of the American farmer at the highest, now is not the time to dismantle one of the key pieces of the farm safety net.


Ryan Ueberrhein is a third generation farmer from Douglas County, Nebraska. He farms corn and soybeans.

Crop insurance critical to farmers

Here in central Nebraska, raising corn is a way of life.

I got started when I was 21 with 160 acres I bought from my grandmother. Today, my wife, Linda, and I farm 3,000 acres of corn. I’m 66 now, and I’ve seen a lot of changes in farming over the years.

Farms are much more productive thanks to advancements in technology. But it takes a lot more land, equipment, planning and investment to grow a modern corn crop and get it to market at a price that allows a family to make a living.

Luckily, we’re pretty efficient in Nebraska.

Last year, we grew $6 billion worth of corn across the state. Of course, that $6 billion in output means farmers had to spend billions of their own money growing the crop.

That’s a lot of risk, and without a strong crop insurance system in place, we couldn’t do it. We couldn’t obtain the capital needed to farm today without lenders being confident that we’re properly managing weather and market risk.

Crop insurance is a unique public-private partnership that protects my investments and protects taxpayers, who no longer have to fund all of the farm safety net.

Before crop insurance, farmers went to Congress after every disaster and asked for help through expensive, unbudgeted relief bills. That wasn’t fair to taxpayers, who picked up 100 percent of the tab.

And because the legislative process took so long, it wasn’t fair to farmers, who needed help immediately.

That is why farmers are willing pay a lot from their own pockets for a crop insurance policy that is specifically tailored to their operation.

In fact, a full-time corn farmer might spend tens of thousands of dollars for a policy and the peace of mind it provides.

Even though we invest a lot in these policies, we hope we never need to cash them in. Because if we’re filing an insurance claim, it also means we’re shouldering a deductible and will have a loss that year. Crop insurance is designed to help you pick up the pieces, not profit.

I’ve seen this firsthand in the drought of 2005 and the violent hail storms in 2014 that brought moderate to severe damage to 16 out of 18 of our fields. I didn’t make any money those years, but I also didn’t go out of business.

That is a far cry from the tough times in the 1980s, before crop insurance was as popular as it is today. Back then, prices were low and farmers feared for their livelihoods.

Prices are also low today, but modern crop insurance takes the fear out of farming. No wonder crop insurance is the top policy priority for most farmers in this upcoming farm bill.

The new administration has promised to protect American jobs and American farms. Keeping crop insurance affordable and widely available is a great way to live up to that promise.


Jim Obermiller, Nebraska corn farmer

Farm policy, crop insurance wise investments for all Americans

Although I was born and raised on a farm, the standing rule in our house was I had to spend two years after college pursuing other things. This was not to discourage me from continuing the family farming tradition. Rather, my father wanted to make certain I knew what kind of life I was signing up for. Perhaps another job elsewhere would provide me with greater financial security and stability than one that was beholden to the weather, markets, foreign subsidies, and even lawmakers in Congress.

I recognized the wisdom in my father’s counsel, but after a couple of years, I knew I wanted to get back to the farm. By then I was married and the thought of raising my family in a small, rural town, combined with returning to the family farm, appealed to me. I have been farming on my own for the past nine years.

What I have learned during this time is this: farming is an enormous game of risk management. It’s not if something bad is going to happen, it’s when. I was aware of this reality growing up, but I fully appreciate it now that I am working to sustain my own farm and support my own family.

Droughts, floods, hailstorms, high input prices, unpredictable commodity prices, the uncertainty of what will come out of Washington whether it is talk of cutting the farm safety net during the life of a farm bill or applying a new regulation that increases the cost of doing business; in addition to competing with foreign governments that cheat on their commitments to free trade and fair markets. These are the challenges that farmers face every year. It is a life that is rife with risk and uncertainty.

Today’s depressed farm economy is a prime example. Commodity prices are half what they were a few years ago while the cost of doing business has not followed the same trend. The financial situation for many farming operations all across the country has deteriorated fast and many lenders are nervous about providing financing.

This is why we need strong farm policy and crop insurance to help us manage things beyond our control like a natural disaster or a collapse in commodity prices.

One of the least understood points about crop insurance is that it’s not just for farmers. That’s how we as farmers talk about it, that it’s a way to keep us in business when we suffer a catastrophic loss. That it’s a way to protect our yearly investment when things go wrong. That is all true, of course, but we don’t explain that it is also insurance for every consumer.

Just look at the drought of 2012 – one of the worst droughts on record – that devastated most of the country. There were times in our nation’s history when that kind of devastation would have put thousands of farmers out of business, especially beginning farmers like me, because farm policy and crop insurance wasn’t what it is today. But, that didn’t happen in 2012. Those risk management tools gave us the ability to stay in business, to make it another year. It provided banks with assurance that operating loans would be repaid despite large losses, and in the process it enabled us to keep a stable and affordable food supply for all American consumers because we were able to begin again.

What affects the farmer will affect the consumer. The tools that help farmers stay viable from year to year and decade to decade, allows consumers to get what they need and want in the grocery stores.

We’re all in this together. We have to remember that fact when Congress begins reauthorizing the next farm bill or some lawmaker in D.C. proposes an arbitrary and irresponsible cut to farm policy and crop insurance. These risk management tools serve us all, especially the next generation of farmers. They are a sound and wise investment for America.


Zach Hunnicutt is a fifth-generation farmer from Giltner who raises corn, soybeans, popcorn, seed corn and milo.

Crop insurance is money well spent by farmers

Many folks might not realize this, but the passage of the 2014 Farm Bill was a turning point in American history, from an agricultural perspective. Largely gone are the days of government support programs like direct payments. In their place, and at the center stage of farm risk management tools, is crop insurance.

I had a chance to learn the value of crop insurance first-hand when my cousin and I rented our first farm together in 2012. We’ve been farming with our family for many years, but felt it was time to expand out and grab some of our own. Of course, little did we know that the year we kicked off our farming careers would soon become the driest year in decades. We lost all of our dryland crops, roughly forty percent of our acres that year. Thankfully, we had purchased crop insurance.

Unlike days of old, crop insurance is not a federal handout. In fact, if farmers want to enjoy the protection provided by crop insurance, they must purchase it. And they do so willingly, spending roughly $4 billion per year out of their own back pockets on crop insurance premiums alone.

For most beginning farmers, crop insurance is nearly a necessity, since banks are hesitant to make loans to farmers who lack sufficient collateral. Crop insurance allows banks the opportunity to increase lending capabilities with the security of crop insurance. That’s because with a crop insurance policy in hand, banks feel more secure making those loans to farmers, since there’s a guarantee of revenue even if the crop fails.

Crop insurance is a public-private partnership whereby individual farmers like me can buy policies for insurance that is specifically tailored for our tolerance to risk and the profile of our 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: it offers some degree of stability in times of disaster. Crop insurance has become, in essence, the nation’s insurance policy for the food supply. When Mother Nature strikes and farmers lose their crops, those with crop insurance policies in hand can bounce back and plant again the next year.

Crop insurance has also removed some of the financial risk from taxpayers. Prior to the rise of modern day crop insurance, the wide-scale disaster that we experienced with the great drought of 2012 would have necessitated a very expensive, ad hoc disaster bill from Congress. Those bills are big and are fully funded by taxpayers.

And while anything is better than nothing when you literally lose the farm, those disaster funds usually took a year or more to arrive in the hands of farmers who needed them. In my case when I lost forty percent of my crop in 2012, a year would have been much too late.

Crop insurance, on the other hand, is administered by private insurance companies and the indemnity arrives in weeks or a month or two, not years later. The crop insurance policy I purchased not only allowed me and my cousin to pay back our production loan, but also meet our forward contracting obligations. And we were able to bounce back and plant the next year. That’s a smart public policy because it ensures food security for our nation.

Of course crop insurance has its critics, and their sights are squarely on crop insurance, since it’s really the only game in town. And that’s why it’s important for farmers to speak up and let their elected officials know how much they value this risk management tool.

Needless to say, if we hadn’t purchased crop insurance our first year of farming, my cousin and I would be spending years paying off that production loan. And without this valuable risk management tool available, I’d venture to say many more of America’s farmers would have been joining us.


Scott Reilly is a farmer and crop insurance agent who lives in Spalding, Nebraska. This op-ed appeared in the Albion News on February 3, 2016.