History demonstrates the importance of a farm safety net

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If my family had kept the farm, I would have been a fourth-generation farmer of a grain operation. But they couldn’t.

The ’80s were not kind to us, and my family made the difficult decision to exit the business. They were not alone. Some statistics show public farm auctions numbered around 500 a month during the darkest days of the decade, with hundreds of thousands of farmers defaulting on their loans. Nearly 2,000 banks failed or received assistance through the Federal Deposit Insurance Corporation between 1980 and 1994, which is more than any other period since the FDIC was created.

Watching my family and neighbors go through this kind of torment made an impression. It’s one of the reasons I am passionate about what I do today. It is a high priority for me as an agricultural banker to do everything I can—not only as a provider of capital and traditional banking products, but a provider of expertise and counsel—to help farmers make the right decisions about their operations. I want them to be prepared for a crisis.

Fortunately, for farmers today there are more tools available to manage the risky business of farming than there were a few decades ago. One of those tools is crop insurance, which has improved significantly through the years to become one of the key pieces of the farm safety net. Farmers have to invest so much money to grow a crop that they rely on banks for operating loans. Banks would have a hard time making those loans without assurance farmers would have a way to pay it back if a natural disaster struck. Crop insurance enables everyone—from the farmer to the banker—to plan for those disasters.

Additionally, crop insurance is structured in such a way that spreads risk across a large and diverse pool of participants so that the impact of losses from a disaster is minimized. That’s because it is widely available and affordable for producers all across the country regardless of their farm size. Without this kind of farm safety net for all of our farmers, large production losses could set in motion a series of events reminiscent of the 1980s when farms failed and banks were stressed to the point of shutting down.

Therefore, it’s critical crop insurance remain intact. Something that seems harder and harder to do in today’s political environment where opponents are determined to destroy the one thing farmers can count on during tough times.

We saw their work in full force during the latest budget agreement that was negotiated at the last minute and included cuts to crop insurance. Thankfully, the agricultural community responded in equal force and demanded the cuts be reversed. Lawmakers are expected to address this provision in the next omnibus spending bill.

We do not want to repeat the mistakes of the past where harsh economic conditions combined with an inadequate safety net caused producers to leave the farm altogether. Right now, we have farm policy in place that encourages sound risk management practices and helps farmers to position themselves for the future.

In the midst of the crisis as he signed the 1985 farm bill, President Ronald Reagan said, “This country is nothing without the farmer, and those who work the land have the right to know that there’s a future in farming. Their children have the right to know that they’ll still be able to work the family farm generations from now and make a decent living.”

By then it was too late for my family and countless others to continue farming, but if we’re smart, we’ll learn the hard lessons from the past so future generations can continue.

Indeed, we are nothing without farmers. And, they can’t survive the vagaries of the business without sound farm policy.

Nate Franzen is the President of the Agribusiness Division at First Dakota National Bank in South Dakota. He has worked in agricultural banking for more than two decades.

Crop insurance helps farmers and ag lenders manage risk

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Weather anomalies have challenged farmers since the earliest days of agriculture. A flood, hail storm or drought can leave a farmer without a harvestable crop at the end of the season. In Central Kansas, producers have been fortunate in the fact that they have not had to endure multiple years of drought or poor production. However, neighboring areas such as Southwest Kansas, Oklahoma and Texas and areas further west have not been so lucky. There is no doubt that crop insurance has helped some farmers stay in business through the tough times.

The United States has learned in hindsight that providing retroactive disaster relief is not only destabilizing for farmers but expensive for taxpayers. Prior to our current crop insurance system, it could have taken months if not years for farmers to receive relief payments following a disaster. While the support did not go unnoticed, there were many instances when the payments came too late to save a farmer from insolvency.

It is a fact that strong farm policy and support for crop insurance goes beyond the farmer, not only benefitting rural America but consumers as well. In the 2014 Farm Bill, crop insurance was recognized as the primary risk management tool for farmers, shifting a good share of the risks associated with farming away from the American taxpayer.

The key to a viable crop insurance system is the public-private partnership that makes it the success it has been. The private sector sells and services crop insurance policies and farmers pay premiums and have deductibles, just like other insurance policies. To incentivize farmers to buy crop insurance, the government partially discounts premiums to ensure that coverage is affordable, available to everyone, and economically viable.

Lenders also play a role in encouraging farmers to make informed decisions about managing their operating risk. At Central National Bank, we are agriculture lenders as well as licensed crop insurance agents. We encourage all of our farmer customers to protect their investment with crop insurance and as a financial institution, we may even be able to offer better loan terms to a producer that implements a solid risk management program.

It is important to keep in mind that crop insurance is a risk management tool, not a profit center. Some have charged that farmers would rather collect a crop insurance check than a good harvest. Nothing is further from the truth. Simple math suggests that “playing the crop insurance game” is not a sustainable business plan. In 10 years of working with producers, I’ve yet to meet anyone who would rather collect a crop insurance check than harvest a good crop.

As we enter into a period of declining margins, it will be important for producers to review all aspects of their operation, including risk management programs. Recently, the farm economy has seen double-digit declines in net farm income as well as increases in the number of short-term operating loans. Having access to viable risk management tools will not necessarily add to the bottom line, but it is important for producers to utilize tools such as crop insurance to protect revenue streams through a possible prolonged downturn in the farm economy.

Not only does a well thought-out crop insurance plan speak to a producer’s management skills, but crop insurance also provides a backstop so producers are able to meet their financial obligations. Ensuring farmers have access to affordable, viable crop insurance options is not only critical for the farm business, but it will certainly impact future ag lending decisions in terms of assessing operating risk for loans.

Aaron Gasper is an agriculture and commercial lender at Central National Bank in Salina, Kansas.

This drought just isn’t giving up, but farmers aren’t quitters

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California’s central valley has been called America’s salad bowl, but honestly in the last four years, it looks more like a dust bowl than a vegetable garden. The historic drought has caused many California farmers to pay prices for water – just to keep their orchards alive – that most Americans would find unfathomable.

Almond, stone fruit, grape and citrus owners once paid roughly $70 per acre foot to ensure that their long term investments had enough water to remain healthy and productive. That cost is now as much as $1,300 per acre foot – about an 1800 percent increase – all while the retail value of their crops has risen very little in comparison.

Estimates are that 170,000 jobs in Kern County alone are directly connected to farming and harvesting. But the number of jobs connected to supporting those farmers, growers and harvesters is around eight times that amount. Crop insurance acts as an underpinning for all of these important jobs and productivity that represent a sizable portion of our economy.

In the past, a wide scale disaster of this magnitude would have triggered a series of very expensive ad hoc disaster bills paid for exclusively by taxpayers. But there has not been a single disaster bill passed even though this drought refuses to release its grip. And that’s because nowadays, farmers are able to purchase the protection and peace of mind of crop insurance.

Crop insurance is a public private partnership whereby farmers purchase policies with their own money, and the policies are sold and serviced by participating companies and agents.

Clearly, the success behind crop insurance is that it’s affordable, viable, and available. Unlike other forms of insurance, any farmer who wishes to purchase crop insurance can do so, regardless of the size of their farming operation or how many years they may have under their belts farming.

Farmers prefer crop insurance because it allows them to pay a premium to help remove some degree of risk from a very volatile business. Twenty years ago, many farmers had never heard of crop insurance. Today, crop insurance protects more than 90 percent of planted acres nationally.

A crop insurance check will never come close to what a farmer can get from a good harvest. But it does offer farmers some peace of mind so that they know that if Mother Nature gets ugly, they can bounce back and be in business again next year. That’s good for consumers, who don’t want their food supply disrupted, and good for the rural economy as well.

When I began this career 13 years ago, I was surprised that bankers were making loans without the guarantee of crop insurance. Obviously, that doesn’t happen much anymore. In fact, it’s very difficult for farmers to get a loan at all without a crop insurance policy in hand.

Of course, crop insurance has its critics who try and make the program sound like another federal handout. Nothing could be further from the truth. In fact, when farmers purchase crop insurance, they receive a bill, not a check. And only receive a payment if they incur a loss greater than a deductible amount chosen a year in advance. Just like homeowners insurance, farmers buy crop insurance hoping they won’t have to use it, but rest better at night knowing they are more secure.

Yes, this drought has been historic and is about as stubborn as a drought can be. But farmers are hardworking, honest and smart businessmen and women who have armed themselves with the best tools possible to weather this storm. And crop insurance has ensured that California’s central valley will remain America’s fruit and vegetable garden for generations to come.

Todd Snider is a crop insurance agent, Kern County Farm Bureau director, Bakersfield Homeless Center director, and resides in Bakersfield.

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.

Crop insurance essential for farmers

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Farm policy used to focus on providing a safety net for traditional row crops. That was largely due to the Great Depression and its lingering effects.

But farm policy has changed to reflect a country with a diverse agricultural sector. The backbone today is crop insurance, and for good reason: Policies can be customized for all types of farming operations. Whether you’re a peach grower in South Carolina like me or a corn farmer in Iowa or a cherry grower in Michigan or a cotton farmer in Texas, crop insurance is designed to cover you when disasters strike. And the more farmers buying policies, the better we all are in the long run because that spreads the risk.

I recognized the value of crop insurance early in my career. In 1995, I was hired to manage the operation I now own, and one of my first decisions was to purchase crop insurance. When I bought the farm a few years later, I already had the production history to be eligible for crop insurance on my own and obtain financing.

There is a direct link between farm financing and being able to go into business, and any farm financing is going to require crop insurance. That’s why I am always alarmed by the attacks on crop insurance by people who have no frame of reference for what goes into starting a farming operation, putting a crop in the ground and surviving whatever calamity may hit. If anything ever happened to crop insurance that made the banking world question its stability, it would devastate agriculture in this country overnight.

I have experienced three complete freezes that would have put me out of business without insurance. It wouldn’t have been just a matter of not paying my bank loans; it would have been a matter of not paying anybody. My crop insurance policy allowed me to cover at least part of my fixed expenses. It made the difference between starting over with a new crop or starting over with a new career.

Crop insurance has become the risk-management tool of choice for American farmers. It would be a disgrace if a few politicians in Washington succeeded in jeopardizing this essential safety net, crushing rural businesses all across the country, with nothing to show for it but political gain.

By: CHALMERS CARR, PRESIDENT OF NATIONAL PEACH COUNCIL

Crop insurance policies are crucial for farmers

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As someone who has spent more than four decades managing a fourth-generation farm and the past 10 years building my family’s crop insurance agency, I believe I have valuable perspective worth sharing regarding how essential today’s federal crop insurance policies are to America’s farmers and consumers.

Specifically, I would like to explain how essential the harvest price option has become to the modern agricultural producer. The harvest price option insures a crop at its actual harvest-time value.

Think of it like a homeowner’s insurance policy: If your home appreciates in value after you purchase it, you are protected at the home’s current value if it burns down and you have to rebuild.

Unfortunately for agriculture, this policy that makes rebuilding possible has come under fire from those who misunderstand the unique risks for farmers who are constantly exposed to the ravages of Mother Nature.

It is important to note that farmers pay an additional premium for this type of protection, and it supports their risk management in two distinct ways. First, a farmer often prices a large percentage of his anticipated — or before-harvest — crop using forward price contracts with a local elevator. If a natural disaster strikes and causes production to fall short of the quantity sold, the farmer would need to purchase enough of the crop to fulfill his contractual obligation. In the meantime, the price of the commodity likely will have have increased because of the overall drop in production after the disaster. Consequently, the remaining crop available to purchase is priced much higher than what was covered under the spring contract.

By purchasing the harvest price option as part of his crop insurance policy, the farmer is able to meet his contractual obligations either by buying grain to deliver under the contract or by making a financial settlement with the purchaser.

A second way the harvest price option becomes essential to producers is if the grain being produced is intended to support the farm’s future animal feed needs. If a natural disaster destroys the grain that is to be harvested, then the producer will be forced to purchase feed instead. If there is a widespread short crop, the feed costs will be much higher.

With the harvest price option on the producer’s crop insurance policy, the farmer will be paid the actual harvest price on his lost production. This, in turn, allows him to purchase the feed needs for his livestock operation and still maintain a viable business.

In fact, allowing farmers to maintain a viable business when the unexpected happens is what crop insurance is all about. The beneficiary is not just the farmer, but also the American consumer.

Crop insurance enables farm families such as mine to pick up the pieces after a disaster and continue to produce food and fiber without significant price increases or supply shortages for consumers.

The fact that Americans spend less of their disposable income on food than any other country speaks volume as to how critical it is that farmers have risk-management tools such as crop insurance.

The critics would do well to try to understand the link between a viable crop insurance program and an affordable, stable food supply before proposing measures that would destroy it — in other words, before biting the hand that feeds them.

By: Gary Riekhof, Missouri farmer and crop insurance agent

Crop insurance helps farmers survive unpredictable weather

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“Frost threatens northern U.S. corn; rains soak southern Plains.”

This recent headline says it all. The diversity of American agricultural production coupled with the varied growing conditions across the country and the swings in weather explains why farmers need a safety net. More importantly, it describes why crop insurance is the centerpiece of the farm safety net.

U.S. multi-peril crop insurance is a risk management tool that farmers, regardless of their location, crop, or production method, purchase to protect against the loss of their crops due to natural disasters such as hail, drought, freezes, floods, fire, disease, or the loss of revenue due to a decline in price. Farmers buy policies to fit the individual needs of the their operations. In 2014, 1.2 million policies were sold protecting more than 120 different crops covering 294 million acres.
I have been farming corn and soybeans for about three decades and I have always purchased crop insurance even though I work in a climate setting that typically doesn’t experience wide weather extremes like our neighbors in other parts of the country.

That doesn’t mean we haven’t been hit with our share of unpredictable weather conditions that made planting and harvesting a crop challenging. It does mean I customize the policy I purchase to meet the needs of my operation.

For example, just two years ago, we had a hard time getting a crop in the ground because nine inches of snow blanketed the area on the second day of May, which is normally the time when we’re wrapping up the planting season. The soil was already soaked from a rainy spring season. That year we didn’t start planting until the middle of May and didn’t finish until the first week in June.

Late planting can potentially put a farmer in double jeopardy – not only are they expecting lower yields because of the delay in planting, but that crop is also vulnerable to frost around the autumn harvest time.

This was the first time in more than 20 years of farming that we planted corn in June – more than a third of our crop. It was also the first time we elected to take prevented planting provisions for roughly 5 percent of our acres as part of our crop insurance policy. Prevented planting provisions are designed to provide coverage when extreme weather conditions prevent a farmer from getting in the fields.

Crop insurance helped us cover some of the loss from that bad year. It made it manageable, which is why it’s an essential risk management tool for my farm and others like mine all across the country. The cost of growing crops has increased substantially. It wasn’t too long ago that it took about half of what it takes to grow an acre of corn. Because of these costs, a substantial crop loss would be a major financial setback for anyone. With crop insurance, we are able to level the highs and lows.

There have been a lot of changes to farm policy through the years to reflect the changing times, but given the diversity of agriculture in our country and the way crop insurance can be uniquely tailored to address disastrous conditions in an efficient and effective way, it should only be strengthened in the years to come.

Peterson is a farmer from Northfield, Minnesota and the president of the Minnesota Corn Growers Association.

Farmers in the northwest need access to affordable crop insurance

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When the 2014 Farm Bill became law, it marked a pivotal moment in the history of U.S. farm policy. The new Farm Bill eliminated direct payments and reduced some of the price support policies of the past in favor of expanding crop insurance, which allows farmers to purchase varying levels of protection for their crops.

Gone are the days when farmers got a check every year regardless of weather or market conditions. Gone are the days when large-scale natural disasters would trigger wildly expensive disaster bills aimed at helping farmers get back on their feet. From here forward, farmers who want risk protection will receive a bill, not a check, when they sign on the dotted line every year.

This is a good thing for several reasons. First, crop insurance ensures farmers have a risk management plan in mind early in the year. In addition to that plan, they must put their money towards purchasing a crop insurance policy. This is no small amount of money for many farmers, who in 2014 spent roughly $3.8 billion on crop insurance premiums.

All told, those policies protected 295 million acres of farmland valued at $129 billion. Today, 90 percent of planted cropland is protected by federal crop insurance, which protects more than125 different varieties of crops in all 50 states.

The evolution to crop insurance has effectively moved risk management away from the public sector, funded exclusively by taxpayer dollars, and toward the private sector, where farmers and crop insurance companies help shoulder part of the cost of natural disasters. This is good for taxpayers because it takes them off the hook for the entire bill when disaster strikes, good for farmers who must always keep their risk management plan in mind, and good for rural America because farmers are the engines that generate economic activity.

Crop insurance has been around since 1938, but it wasn’t until Congress decided to make it affordable and ubiquitous that farmers really began to sign up. And when disaster struck – as it does nearly every year somewhere here in the Northwest – farmers turned to their crop insurance policy and their insurance company, not their member of Congress, for help.

The demographics of farming can be rather scary, with the age of the average age of the nation’s 3.2 million farm operators at 58 years old and rising daily. For young and beginning farmers, access to affordable and reliable crop insurance is honestly a make-or-break issue. For those just entering farming, the costs are high and their ability to sustain a loss is very limited. For them, purchasing a crop insurance policy not only protects their crops, but their careers paths as well.

Crop insurance is very popular here in the Northwest, with farmers and ranchers in Washington, Oregon and Idaho spending more than $96 million out of their own pockets last year to purchase the peace of mind offered by crop insurance. Those policies protect the region’s apples, potatoes, sugar beets and a long list of other crops from the ravages of Mother Nature and volatile market swings.

In the old days, farmers largely relied on disaster assistance from the federal government in times of crisis. According to the Congressional Research Service, some forty-two ad hoc disaster assistance bills cost taxpayers $70 billion since 1989.

With access to affordable, available and viable crop insurance policies, farmers have the backstop they need to bounce back when our rapidly changing climate throws them a curve ball. That’s good for farmers, good for consumers who eat their produce, and good for the rural economy, which is largely supported by local farmers and ranchers.

Kent Wright is president of Northwest Farmers Union. This op-ed appeared in the Tri-City Herald on May 30, 2015.

No crop insurance would mean no food

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We are blessed in this country to have the ability to grow our own food and have enough to export to other nations.

In fact, that is what inspired me to farm. I had a passion for growing food and, in the case of my home state of Washington where wheat is a highly exported commodity, I had the satisfaction of knowing that my work as a farmer contributed to feeding people not only at home, but all across the globe.

The food security we enjoy in this country is made possible in no small part through United States farm policy. With the 2014 Farm Bill, Congress shifted the focus of farm policy to risk management. It made crop insurance the centerpiece, and quite rightly. It helps farmers recover from natural disasters and volatile market fluctuations. It enables them to plan and budget for the long term in the most effective and efficient way.

Farming is an inherently risky business. Even my wheat farm, which is located in the rolling hills above the Palouse River, and considered some of America’s most fertile ground, is vulnerable to serious weather events that can devastate my crops in any given year. I have been farming for more than three decades and I can say, without question, if it weren’t for crop insurance I would not be in business.

And, crop insurance is good for consumers and taxpayers, too.

Without effective and affordable crop insurance, catastrophic production losses would sap the rural economy by setting in motion a series of harmful events: farm failures and consolidation, job losses, financial stress on rural banks and reduced investment in U.S. agriculture.

Emergencies can happen to all of us. There have been enormous emergency bailouts for victims of floods, hurricanes, earthquakes and other disasters. But because of modern crop insurance, farmers have survived some of the worst production years in memory without that kind of disaster relief. Crop insurance fills the need.

This reality is why I am always concerned by those who criticize farm policy or, worse, advocate for its demise, usually by spreading misinformation about the cost and mechanics of farm policy and crop insurance.

One of the misconceptions is that crop insurance is a handout to farmers. Actually, farmers spend $4 billion a year out of their own pockets for insurance protection. They only collect an indemnity after they’ve suffered a verifiable loss and they’ve shouldered their deductible.

Another attack includes barring farmers with large operations from participating in crop insurance. This would be foolish policy because any risk management pool needs a large and diverse group of participants. We want the most productive farmers in the pool to spread the risk. In the same vein, car insurers want safe drivers to buy insurance to help balance losses from more accident-prone drivers.

A financially healthy rural economy requires a financially healthy farm production sector. And that sector relies on a safety net when catastrophic events happen. It is a modest investment considering the return, which is a stable and affordable national food and fiber supply.

Brett Blankenship is the president of the National Association of Wheat Growers. He farms winter wheat in southeast Washington.