Risk mitigation tools - like crop insurance - helps farmers return to the fields
Tim Ostroski, a dairy farmer from Sterling, Michigan, is all-too-familiar with the importance of risk management tools. Like many dairy farmers, Tim grows his own corn. This helps him control some of his input costs while providing quality feed for his cows, which ultimately ensures quality milk.
In 2016, 13 inches of rain washed out some of his 750 acres. Later in the summer, two hail storms knocked down fields of his corn. Then the rain stopped and drought reduced the yield on his corn even more. Fortunately, Tim bought crop insurance through Greenstone Farm Credit Services before a single seed went in the ground. That safety net mitigated his financial loss, allowing him to buy additional corn to feed his cows.
Tim’s experience underscores why Congress created the crop insurance system: to promote the economic stability of agriculture. It is a successful public-private partnership that is federally regulated and delivered by the private sector to help farmers maintain the country’s safe, affordable food supply .
Willie Hernandez appreciates the range of coverage options available, especially for his cotton crop. A customer-owner of Farm Credit of New Mexico, he has successfully farmed for 39 years in Berino, New Mexico, and carefully manages his risk. Over the years, hail and wind have significantly damaged his crop – not to mention when hungry jackrabbits attacked his cotton. Crop insurance has been his safety net.
Without crop insurance, farmers like Tim and Willie would experience devastating losses that could threaten their businesses after just one or two bad years.
As a dedicated provider of credit to rural communities and agriculture - in good times and bad - Farm Credit supports a strong federal crop insurance program. Created by Congress, the Federal Crop Insurance Corporation (FCIC) promotes economic stability. Crop insurance protects farmers and ranchers against financial losses caused by weather and market disruptions that could result in lower prices for agricultural products.
The program is a successful public-private partnership. It is federally regulated and delivered by the private sector to help farmers maintain the country’s safe, affordable food supply. This viable program also allows lenders to finance many agriculture producers, particularly young and beginning farmers, who typically have less collateral and equity.
In particular, Farm Credit advocates to maintain a strong farm policy that includes affordable crop insurance. Impairments to the program, such as shrinking the risk pool, could make crop insurance unavailable or unaffordable to producers.
We also advocate for more coverage options for specialty and niche crops, while continuing to serve the program's traditional commodities constituency.