Farmers can rest assured that crop insurance is strong and vibrant and was designed to be able to endure the types of losses we’ve seen over the past several years, said the leaders of two key crop insurance organizations today during the joint national convention of the National Crop Insurance Services (NCIS) and the American Association of Crop Insurers (AACI). “Hopefully, the rains that farmers have been praying for will come this spring. But if they don’t, then that’s why the federal crop insurance program is here,” said Steve Rutledge, NCIS chairman, during his opening remarks. Rutledge pointed out that farmers paid $4.1 billion out of their own pockets for the protection of crop insurance in 2012. “One of the reasons why this public-private partnership works so well is that those who seek protection must first put ‘skin in the game,’” he said.
Rutledge noted that while farmers were possibly facing three bad years in a row, the federal crop insurance program has been around since 1938 and farmers should know that when they purchase a policy and suffer a loss, their indemnity is something they can count on. “One of the many reasons why farmers love crop insurance is because when disasters strikes – and that happens all too frequently in farming – help is there quickly,” he said.
Sharing the stage with Rutledge was Greg Deal, chairman of AACI. Deal called the 15,000 crop insurance agents and 5,000 claims adjusters “the unsung heroes” of the industry, because they work directly with farmers to ensure that crop insurance is fast, accurate and efficient. “The agents, who are often farmers themselves, understand the risks involved in farming and how unnerving a bad crop year can be,” he said.
Deal explained that the recent drought really put the adjusters’ “feet to the fire,” necessitating long work days, often including weekends. “In 2012, more than 436,000 policies were indemnified, a number that clearly demonstrates the workload bore by our adjusters,” he said.
With drought conditions expected to continue in 2013 and farm policy getting added attention in the halls of Congress, this year will likely be as busy for the industry, Deal explained.
“What we’ve heard from almost every commodity group and farm organization is “Do No Harm” to crop insurance. This program is a three-way partnership between the general public, the farmer and the private sector, and all three benefit from their investment,” said Deal. “Crop insurance is the risk management tool of preference – and for some the only risk management tool available – to the vast majority of America’s farmers.”
Deal added that the farm safety net, namely crop insurance, underpins the agricultural sector that not only generates a dependable supply of food but is helping drive the U.S. economy – all for less than one-quarter of one percent of the federal budget.
That, concluded, Rutledge, is why farmers see crop insurance as the “number one risk management tool in their arsenals.”