FB NEWS – With 2018 farm profitability expected to hit a low not experienced in more than a decade, the American Farm Bureau Federation and more than 55 other organizations are urging congressional budget leaders to protect crop insurance. The organizations represent a range of interests from farmers and ranchers to conservationists and lenders.
“An overreliance on budget savings from the agriculture community and from crop insurance will unquestionably undermine rural economies,” the groups warned in a letter to House Budget Committee Chairman John Yarmuth (D-Ky.) and Ranking Member Steve Womack (R-Ark.) and Senate Budget Committee Chairman Mike Enzi (R-Wyo.) and Ranking Member Bernie Sanders (I-Vt.).
The groups also noted the public-private partnership that is crop insurance has been a consistent and reliable risk management tool for farmers, particularly at a time of heightened uncertainty in agriculture caused by natural disasters, trade disputes and government shutdowns. Crop insurance is important to lenders, too, because it provides them the assurances they need to continue to provide capital to farmers and ranchers.
With an emphasis on risk management and a basis in fundamental market principles, crop insurance protects American taxpayers. Collectively, farmers, who customize their policies to their individual farm and financial needs, spend $3.5 billion to $4 billion per year of their own money to purchase insurance from the private sector. Furthermore, on average, they must incur losses of almost 30 percent before their insurance coverage pays an indemnity.
“Farmers and lawmakers agree that crop insurance is a linchpin of the farm safety net and is crucial to the economic and food security of rural America. The importance of crop insurance was just reaffirmed less than two months ago with the passage and signing of the 2018 farm bill, and we urge you to oppose cuts to crop insurance during this year’s budget process,” the groups concluded.
Posted by: FB News, February 25, 2019