OMAHA (DTN) -- Leaders of Congressional budget committees are being asked not to sacrifice crop insurance as part of upcoming budget proposals this year. The request came in a letter from 60 agriculture, insurance, government and environmental groups on Tuesday.
The letter, addressed to budget committee chairmen and ranking members on the U.S. House of Representatives and the U.S. Senate, urged leaders to protect crop insurance and recognize its "central importance" to farmers, lenders and all of rural America.
Groups signing the letter include Environmental Defense Fund; National Association of State Departments of Agriculture; National Association of Wheat Growers; National Barley Growers Association; National Corn Growers Association; National Cotton Council; National Council of Farmer Cooperatives; National Crop Insurance Services; National Farmers Union; National Grain and Feed Association; National Milk Producers Federation; Agricultural Retailers Association; American Farm Bureau Federation and the American Soybean Association, among others.
"USDA has projected that 2018 farm profitability will be lower than it has been in over a decade, and farm income dropped more than 45% in five years," the letter said.
"An overreliance on budget savings from the agriculture community and from crop insurance will unquestionably undermine rural economies. It's also important to note that in a time of uncertainty in the farming and ranching community -- from natural disasters to trade disputes to government shutdowns -- the public-private partnership that is crop insurance has been a consistent and reliable risk management tool."
Earlier this week in San Diego, Wells Fargo Agricultural Economist Michael Swanson told an audience at the Crop Insurance and Reinsurance Bureau annual meeting that banks will not make loans to all financially troubled farmers who have crop insurance this year, even though they will require farmers to buy the insurance.
In their letter, the groups said federal crop insurance offers ag lenders the "assurances" they need to continue to provide capital to farmers and ranchers. They stressed that "risk management" was an emphasis of the 2018 farm bill, and that crop insurance plays a key role in a farmer's risk management strategy.
"Farmers spend $3.5 to $4 billion per year of their own money to purchase insurance from the private sector. On average, farmers also must incur losses of almost 30% before their insurance coverage pays an indemnity."
"Cuts to crop insurance during this difficult time for rural America should be avoided. 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."
Read the letter here: http://portal.criticalimpact.com/…
Todd Neeley can be reached at email@example.com
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