Crop Insurance Retains Big Ag Role

GRAND FORKS, N.D. - Though it doesn't draw much attention outside agriculture, March 15 was an important day in Upper Midwest ag. It's the annual deadline for purchasing or modifying federally subsidized crop insurance - a key risk management tool - for most spring-planted crops in the upcoming growing season.

Tom Zacharias, president of National Crop Insurance Services of Overland Park, Kan., which represents private crop insurance companies, understands March 15's importance as well as anyone. And his job, at least part of it, is convincing lawmakers and the general public that federal crop insurance is good and necessary.

"Our economy and country is dependent on a financially viable agricultural sector," which federal crop insurance helps maintain, he says.

The weeks leading up to March 15 are extremely busy for most Upper Midwest crop insurance agents. They huddle with clients to fine-tune and update policies to reflect changes over the previous year.

"It's important for producers and their agents to sit down and talk about their crop insurance policies. They really need to do that every year," says Andy Swenson, North Dakota State University extension farm management specialist.

Working on policies this spring hasn't been quite as complicated, but remains just as important, as it was in 2016 and 2015, Zacharias says.

Most of the major changes to federal crop insurance made by the 2014 farm bill, the centerpiece of U.S. food and ag policy, were implemented in 2015 and 2016. That reduces the complexity of this year's work, he says.

Even so, it's still essential for agents and their customers to discuss their policies before the March 15 deadline, he says.

It appears that coverage levels for the 2017 crop season will remain "fairly steady" from what they were a year ago, Zacharias says.

Federal crop insurance seeks to protect farmers from "unavoidable risk" associated with bad weather, crop disease and insects. Taxpayers pick up some of the cost, farmers the rest. Crop insurance policies are sold and serviced through private companies. The federal government subsidizes the program to keep it affordable.

Critics claim the subsidies are too big and that the program unfairly benefits large-scale farmers at the expense of small ones, among other perceived shortcomings.

Supporters say the program is an effective, sensible method of helping farmers manage risk and stay in business when weather or pests hammer their crops.

The crop insurance industry and its supporters continue to win more support from the general public, Zacharias says.

A 2016 survey of registered voters found that when federal crop insurance "is accurately explained, the vast majority is supportive. There is consensus that the cost-sharing structure of the public-private partnership is sound and works for all the parties," he says.

Nonetheless, "One can never rest on its laurels," he says. "Farmers and others in agriculture do need to come together and push back against the critics of what I believe is farm sound policy."

Congress is gearing up to write the 2018 farm bill, which potentially could include major changes to federal crop insurance.

Zacharias is uncertain how federal crop insurance might fare under the Trump administration.

But Congressional leaders and most farm groups strongly support crop insurance, which bodes well for the program's future, he says. And he notes that crop insurance supporters have won approval for the program under new administrations in the past.