Crop insurance helps multi-generational farm weather the ‘perfect storm’

My family, which farms 21,000 acres of wheat, alfalfa and vegetables in Benton County, often jokes that our great-grandfather Lenzie Berg should have perhaps thought twice before he decided to stake his claim in one of the driest regions west of the Mississippi.

We are kidding, of course — we wouldn’t have it any other way. Farming is a way of life for the Berg family. It is in our blood, so much so that my brothers and I came back home to help our father on the farm after we completed our educations. We know farming isn’t something we will ever get rich doing, at least not in the fiscal sense, but we take great pride in the role we play in feeding and clothing our growing world.

You do, however, have to get creative when you are farming in an area that, on average, only gets seven inches of rain a year. Our conversion from dryland to irrigated farming, for example, was by no means an easy or inexpensive undertaking, but essential to preserving our family farm for the next generation.

Year after year, we apply the real-life lessons passed down by our father and grandfather, our own unique expertise and lots of old-fashioned sweat and tears to the task before us — producing a bountiful harvest.

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But sometimes, that task can be insurmountable, no matter the level of education, experience and resiliency.

Farming just isn’t like other businesses out there. There are a number of factors out of our control — and at the top of that list is Mother Nature. As most of us are painfully aware, we have experienced a historic drought here in Washington over the past three years, and farmers have been fighting an uphill battle every step of the way.

In addition to the beating we have taken by Mother Nature, commodity prices, which are also out of our hands, are about half of what they were a few years ago. Meanwhile, the cost of farming just continues to go up.

In short, we have faced a “perfect storm” of challenges that would have, quite frankly, forced us to close our doors had we not purchased crop insurance.

Crop insurance — a unique public-private partnership that is the cornerstone of the farm safety net — is something we purchase every year. It operates in a very similar way as other insurance policies. We pay a premium to an insurance company based on the value of our property, and anticipated risk, to insure its worth. If the property is damaged, we take a hit for a portion of the loss and the insurance company covers the remainder through an indemnity payment.

Farmers collectively pay between $3.5 billion and $4 billion a year out of our own pockets in premiums. And we absorb hefty deductibles (on average, 25 percent of loss).

As is the case with other insurance policies, we purchase crop insurance in the hope that we never have to use it. And, when disaster strikes, we use the policy to pay our bills. It isn’t close to what we would collect from a healthy crop, but it allows us to keep farming.

Crop insurance also eases the burden on taxpayers. Prior to the emergence of crop insurance as the top risk management tool for farmers, natural disasters regularly resulted in very expensive, unbudgeted disaster bills from Congress.

Thankfully, those days are behind us.

As we begin negotiations around a new Farm Bill, I for one will be an outspoken advocate for crop insurance. It is not just an “insurance policy” for farmers, but also an “insurance policy” against disruption and financial instability in the food production sector, which could have widespread negative repercussions affecting every American.

I encourage anyone who prioritizes a safe, stable and affordable food supply to join me.

Nicole Berg is a partner in Berg Farms of Paterson.

No crop insurance would mean no food

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.