Witnesses praise crop insurance

2017-03-18T08:00:00Z Witnesses praise crop insurance Illinois Farmer Today
March 18, 2017 8:00 am

Editor’s note: The Senate Agriculture Committee heard from farmers, lenders and others during its field hearing last month in Manhattan, Kan. These are among comments they heard about crop insurance. Full texts are available at http://bit.ly/2luiWcn.

‘Hope we don’t collect’

The crop insurance program will be attacked by special interest groups during the farm bill process. I wonder if anyone understands the need for a solid crop insurance program more than the Kansas farmer.

Drought, hail, wind and floods can ravage farms and sometimes Kansas farmers can experience all of these disasters in the same year.

Unlike car insurance, crop insurance protects us against systemic risk.

Every year, we hope we don’t collect a crop insurance payment, but when we do have a loss, crop insurance provides critical support to farmers and the rural communities that serve agriculture.

Kent Moore, director, Kansas Corn Growers Association, Iuka, Kan., on behalf of the association.

Keep farms in business

If it were not for the federal crop insurance, the Livestock Forage Program (LFP) and similar safety net programs, many of my neighbors would no longer be in business.

We’re able to sign loan papers at the bank, consult with our agronomist, seed salesmen, equipment dealer or commodity broker and even plan for increased crop diversity and rotation. …

However, crop insurance is not without its shortcomings. Due to a prolonged drought in western Kansas, many of my neighbors’ Actual Production History (APH) has declined.

With commodity prices being as low as they are today, some producers have little to no revenue protection offered through crop insurance due to the APH and price calculation.

Many are leaving the program to self-insure until prices rebound considerably or Congress finds a solution to the eroded APH.

Amy France, France Family Farms, Marienthal, Kan.

Help secure financing

One success of the 2014 farm bill was the continued support of crop insurance programs.

Agricultural lenders use crop insurance as a guarantee to help secure financing for operating credit.

With crop insurance, a lender has the ability to provide support based on individual producers’ proven crop yields. This allows lenders to tailor a loan to a producer’s operation and allow for year-to-year adjustments within that operation.

Without crop insurance acting as a safety net, producers would be in a much more challenging financial situation in the event of disaster.

Crop insurance has allowed lenders to provide the best possible terms for operating loans because it helps to lower the risk for the lender.

Shan Hanes, First National Bank, Elkhart, Kan., on behalf of the American Bankers Association

Support local economy

The strength of the current crop insurance partnership rests in the ability for a farmer, or rancher, to select products that meet their needs for individualized risk management.

As an example, the foresight of producers who purchased crop insurance in 2012 mitigated the direct financial impact on their operations even though final corn and soybean yields were significantly below trend lines for both crops as a result of drought that year. …

Though each case is different, farmers who purchased crop insurance generally received income that would at least cover their investment in the 2012 crop.

That means most were able to plant again in 2013, continuing to produce feed, food and energy and averting consumer inflation. They also were able to make purchases at their neighbors’ stores and other businesses, which helped support the economy in every local community.

Gena Ott, Frontier Farm Credit, Emporia, Kan.

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