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FARM POLICY FACTS: FARM BILL CEMENTS CROP INSURANCE AS CORNERSTONE OF FARM POLICY
Source: Farm Policy Facts news release

Just days after the 2014 Farm Bill was signed into law, crop insurers gathered for their annual meeting to assess where the industry had come and where it is going.

One of the key architects of the Farm Bill, Michigan Senator Debbie Stabenow, told the crowd that they began writing the Farm Bill three years ago with deficit reduction in mind and they kept that focus to the very end. She pointed out that key to taxpayer savings was the transition away from direct farmer payments to insurance policies that are purchased by farmers and serviced by the private sector.

"The farmer gets a bill, not a check with crop insurance ... and they don't get help unless they really need it," Stabenow said, referring to the premiums farmers pay and the indemnities that are only received after losses are verified.

Stabenow told the crowd that in addition to the strong support among farmers that was evident during the writing of the Farm Bill, new coalitions would be needed to defend the policy from critics in the future. At the forefront of this effort will be the continued partnership with the conservation community.

National Crop Insurance Services (NCIS) Chairman Tim Weber told the crowd that recent passage of the Farm Bill cemented crop insurance as the cornerstone of farm policy.

"If I had to sum up the story of the crop insurance industry in one simple statement, I think it would have to be, 'We've made a lot progress but our best years remain ahead of us,'" he said during his opening remarks.

Weber noted that in order for crop insurance to remain viable as farmers' primary risk management tool, the crop insurance infrastructure must remain financially strong, while the industry continues to focus on effective risk management tools and program integrity. Continued widespread participation will also be paramount.

"There can be no question that when it comes to managing the risks posed by Mother Nature or volatile world markets, federal crop insurance has no equal," he said, adding "this success was achieved all the while overall federal spending on farm programs has trended down."

Dan Wrinn with Ducks Unlimited (DU) explained that important relationships forged during the Farm Bill debate would continue well into the future. "We put this coalition together and it worked, but it doesn't end here," he said. "Our coalition drew a lot of attention [because people] saw what the potential was ... if you get crop insurance, if you can get commodity groups, and if you can get the conservation groups to come together," Wrinn added.

NCIS President Tom Zacharias pointed out that the ability of farmers to quickly recover from the 2012 drought demonstrated the role crop insurance plays in risk management and recovery for farmers. "The fact that farmers were able to bounce back with a vengeance from the worst drought in decades and plant bumper crops, all without a call for disaster assistance to Congress underscores the value farmers place on crop insurance and why they are buying it up and protecting a record number of acres," he said.

Zacharias noted that 2013 had been a remarkable year for both farmers and the industry. He noted that last year farmers spent more on purchasing crop insurance than the previous year, more acres were protected and total liabilities protected increased.

Looking ahead, USDA's Risk Management Agency (RMA) Administrator Brandon Willis, told the crowd that cooperation between the agency and crop insurers would be essential during implementation. "There is not an agency that I would rather implement a Farm Bill with than the team that we have at the Risk Management Agency.

I have a high degree of confidence that the staff we have there will get this done right," he said. "Throughout the process, we will work with our [private sector] partners, because I know you bring valuable experience ... and a perspective that we don't have," he said.

Willis complimented crop insurers for their service record following the historic 2012 drought and for their hard work when the government was shut down earlier this year. Constantly improving crop insurance availability, program integrity and communicating with farmers and the general public should be top goals of both the industry and RMA moving forward, he said.


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