Mike's Blog

Insights from the President of ProAg

The Godfather Part II, 1974

by Mike Connealy on 07.06.2012

Hyman Roth and part of his famous line directed at Michael Corleone (another slightly more famous, yet fictional MC):

“…this is the business we’ve chosen…”

Whenever things get bumpy in the crop insurance world, that line runs through my head and reminds me that despite misinformation sources like EWG and despite a generally naive press even in farm country, crop insurance chugs along doing its job. The Minneapolis Star Tribune ran a poorly written front page article today about how crop insurance is costing the taxpayers billions of dollars plus ruining farm economics. They used the Environmental Working Group (EWG), a known anti-agriculture think tank, as apparently their only source and went so far as using the inflammatory term “money bag” in their headline.

It makes a person such as MC having spent 33 years thus far motivated more than ever to continue to fight the good fight to retain a viable crop insurance program. To read the Star Tribune and their biased article only leaves one wondering how the program exists and how did Congress ever dream up such an abomination if it’s as they described? Had the Star Tribune sought to educate themselves and use informed sources within the Minneapolis-St Paul metro area, they could have written an article that included the benefits of the crop insurance program. Within the seven county metro Twin Cities area are two small administrative offices of Risk Management Agency (RMA) the crop insurance arm of the USDA. The small town of Anoka, Minnesota is the national headquarters of the nation’s largest crop insurance company, RCIS. In nearby Ramsey, Minnesota sits the national headquarters of NAU another large nationwide crop insurance company. Regional offices for Rain & Hail Insurance Services and ProAg® are also within the Twin City metro area. Agribank, a large enterprise within the Farm Credit system is headquartered in St Paul and involved in various aspects of farm lending—including crop insurance—across more than a dozen corn belt states. None of these informed sources appear to have been contacted and none are quoted. It is my belief that a good newspaper reporter tries to balance an article with facts and contact potential parties that might be opposed to the general direction of the news story in question. This story seems to be a pure hatchet job consistent with the Star Tribune anti-Farm Bill position. Coincidentally, the Star Tribune editorial for today is a meandering view on anti-Farm Bill rhetoric. Sort of a broadside opposition to most Farm Bill components except food stamps, which need to magically encourage recipients to go to Farmer’s Markets and buy price-premium, organic vegetables.

In another remarkable coincidence, the Star Tribune today ran a portion of a New York Times story about the current devastating drought in Indiana, about how local corn farmers and crop insurance adjusters are preparing for the worst. Which reminded me of why we do what we do and why “this is the business we’ve chosen”. We’re here to allow those Indiana corn farmers peace of mind when they go to sleep each July night with another 100 degree forecast for tomorrow looming—most all of them bought crop insurance and they will be able to “tee it up again” in 2013, should they choose to do so.

The last several Farm Bills out of Congress starting with the Jimmy Carter administration including the 2008 Farm Bill have sent a strong message to farmers—buy Federal crop insurance. This message has been received by the USDA, insurance companies, insurance agents, lenders and farmers. We provide protection against a number of perils including weather and price risks that are out of the control of the individual farmer. The stakeholders are doing so legally under passed and funded legislation and in a manner consistent with limiting fraud, waste and abuse.

So, the fact is that since 1980, Congress and USDA have authorized private sector delivery of crop insurance through approved insurance providers (AIP) and local insurance agents. We have responded with sophisticated risk management tools and local farmers such as those referenced above in Indiana—supported by their banker —have answered by signing up. The naysayers such as EWG seek to spin this as a negative. Their misinformation campaign is now directed at crop insurance after the apparent demise of direct payments to farmers. Our job is now again to educate certain members of Congress about “this business we’ve chosen”.

Public and private sector partnerships are not rare in the USA. They should not be viewed in a dim light or that an AIP employee or a crop insurance agent are on the take from Uncle Sam. We are private sector employees doing a service that needs to be done and provides value to anyone who eats in the USA. Look at a publicly traded company such as Lockheed Martin or General Dynamics—high tech defense enterprises that develop Star Wars type tools for the military. Some of the greatest living science and engineering minds work for these companies—guess what, they know that these space age tools are going to be sold to the United States government to defend and protect people in the US and in most every other nation in the world. These valuable members of society are not on the government payroll any more than a crop insurance adjuster working for ProAg in West Texas. Both instances, the public sector is doing what they are supposed to do and the private sector is merely reacting to the message sent from Congress. Fortunately our Congress has thus far been consistent. Congress wants food security and crop insurance is the cornerstone supporting this national interest.  In closing, MC is more proud than ever to be a part of ProAg and the crop insurance industry. This is the business we’ve chosen and for good reason. We provide a valuable product to people that need it, and don’t let the uninformed lead you to think otherwise!!


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