Crop Insurance: Covering America

President Obama signed the Agriculture Act of 2014, or the Farm Bill, just over a year ago on February 7. It contained some very important legislation to farmers and the citizens who rely on their produce. As crop insurance agent, Elvin Anderson, put it, “Had we not had that safety net, it might be difficult for you to walk to the supermarket and pick up that loaf of bread.” That “safety net” he refers to is crop insurance.

            Before the significance of the crop insurance portion of the bill can be understood, crop insurance itself should be briefly described. Crop insurance protects farmers from the loss of revenue from the destruction of their crops due to natural disasters, disease, or wildlife. It also protects from a decline in price.  It uses the projected worth of commodities to create a fair price that farmers may purchase policies at to hold that price for their crops. If, for any approved reason, those crops should lose that value, the farmers will be compensated for the loss (Langstraat).

            This new “farm bill” provided many changes to the crop insurance program, which the United States Department of Agriculture (USDA) claimed “strengthens crop insurance by providing more risk management options for farmers and ranchers and by making crop insurance more affordable for beginning farmers.” To do this, the Price Loss Coverage (PLC) and the Agriculture Risk Protection (ARC) programs were implemented. The programs are meant to supplement private insurance policies to protect farmers when a price drop is experienced for multiple years. They are also meant to help the farmer meet the deductible of their crop insurance. Along with the two new programs, many more products were added to the list of covered crops. As the main factor in the “safety net,” it is important for crop insurance to cover a variety of farms and farmers (Langstraat).

            To assist in the wide range of coverage required by the diversity of agriculture in the U.S., the Whole-Farm Policy was also introduced in 2014. It is meant to more effectively cover highly diversified farms and farms selling 3-5 commodities to wholesale markets under one policy. By purchasing this policy, a farmer may now cover all of the crops on their farm, including specialty crops (United States Department of Agriculture). This allows for even more coverage to be extended to farmers.

            It is seen how important agriculture is to America through the extensive legislation that goes into protecting the industry. The population relies on farmers. In turn the population goes to great lengths to keep them in business.

Sources:

Langstraat, Laurie. “Just the Facts.” Crop Insurance Keeps America Growing. National Crop Insurance Services, n.d. Web. 1 March 2015.

United States Department of Agriculture. Risk Management Agency. USDA, April 2014. Web. 1 March 2015.