What is in this article?:
- Crop insurance may be the cornerstone of the next farm bill.
- The U.S. had 264 million acres covered nationwide last year —more acres than ever before. Total premiums paid and total coverage slashed all previous records.
- The U.S. had $4.5 billion in premiums paid and total coverage of $114 billion, roughly 20 percent more than the previous record.
As discussions move forward on the 2012 farm bill, crop insurance is expected to be a major component of the legislation that is developed, says Keith Coble, professor of agricultural economics at Mississippi State University.
And, he says, farm programs continue becoming increasingly complex.
“I don’t think we hear as much about crop insurance in this part of the country as in the Midwest, the Plains, or other areas,” he said in a panel discussion at the Mississippi Farm Bureau Federation’s annual commodity conference.
“But when we talk to folks in Washington, that seems to be their message — that crop insurance is going to be the part of the commodity title that is most likely going to be maintained and not touched, while direct payments is the part that is most likely going to be most at risk in terms of continuation in the future.”
Coble, who has many years of experience in farm policy and programs, says “Our region is in something of a unique situation in the coming farm policy debate, in that one of the big issues is going to be: Do we have a common program, or do we let different commodity groups go their own way?
“In the debate last fall, there wasn’t time to coalesce on one plan, but a lot of attention was given to different plans for different commodities.
“Almost every day, we read that, across the country, commodity groups are saying their No. 1 priority is crop insurance, that their No. 1 priority is a safety net.”
That suggests, Coble says, that Mississippi Farm Bureau to “was wise, more than a year ago, to sit down and start talking about risk management programs and crop insurance, and how to address those issues in this region.
“Crop insurance is different than our traditional countercyclical payments and other programs in that it is delivered through a private sector group. A lot of people are talking about commodity programs in terms of, do we want shallow loss or deep loss programs, but I think another part of this question is going to be, who delivers? And that’s not a very popular topic.”
With crop insurance, Coble says, “There are premiums to be paid and rates to be set, and there are a lot of nuances as to how this is done. I would suggest that everyone needs to become more attuned to these issues and more educated on them, so they can effectively communicate with those who are writing the programs.
“I would suggest, too, that you focus on the big things rather than getting bogged down in the minutiae of these issues. It’s really easy to get lost in the minutiae of a complicated program.”
And Coble says, the U.S. has moved into “an era of very, very complicated programs. ACRE was unbelievably complicated. Crop insurance is very complex, as well.
“This means there is a challenging learning curve for farmers and farm organizations, and it will be worth your while to invest the time and effort to figure out the facts, to understand the basics of the program, and what the choices are for you, because this is probably where we’re going to be for the next several years.”