With insurance payments to farmers for the 2011 crop already topping a record-high $9 billion, Mark Lange, president and CEO of the National Cotton Council, says crop insurance will be the key to farm policy's future. That's why the cotton growers have made it the centerpiece of their policy proposal for cotton.
Lange says that one of the biggest attributes of the current crop insurance infrastructure is private-sector delivery, which speeds payment to growers when they need it the most, after disaster strikes.
"Most of our growers that didn't see a stand come up, that are dry land growers, I think were seeing crop insurance debt indemnities paid prior to Labor Day," Lange said. "The other great thing about crop insurance from a grower's perspective is that crop insurance policies come in a vast array of styles and coverages and a grower can very closely tailor the specific policy that they're acquiring to their farm situation and their pocketbook."
Speaking at the annual convention of crop insurers last week Lange noted that lawmakers face a daunting challenge as they try to craft a new farm bill with elections approaching quickly and budgets declining. But he believes what emerges will preserve the public-private partnership of crop insurance and ensure the long-term viability of America's food and fiber supply.
"I think it is clear that the delivery of insurance or revenue programs from government has a very chilling effect for agricultural producers," Lange said. "I say that because I hear that from our producers. The SURE program is just now providing benefits to growers on losses they incurred in 2009. That's just too long."
Lange doesn't think most of the agriculture industry is interested in an insurance product from the government. He says it's remarkable there were no calls for an ad hoc disaster bill after the extraordinary year agriculture faced in terms of difficulties, but Lange believes that speaks to the popularity of crop insurance.
"We've seen in the last 10 years this rather dramatic increase in the purchases of crop insurance across the board in agriculture," Lange said. "Not only is it popular, it's effective; it is really serving a need out there. The other thing I see is the signal denominator across all the commodity organizations involved in agriculture as we look at this farm policy, is a reliance on private sector delivery of effective and cost effective crop insurance."
Lange says it's clear agriculture is interested in crop insurance as a very good risk management tool. He says it came through last year, and most of agriculture is relying on crop insurance being in future farm policy.