A Look Back as ProAg Marks 100 Years, For Generations

By 1996, farm country was no longer in the daily grip of the 1980s farm crisis, but the lessons from that period had not faded. Producers were paying much closer attention to debt, markets, weather, technology and the need for risk management protection before a loss occurred.

Crop insurance changed quickly during these 10 years. Insured acres increased, revenue products gained ground and new federal policy lowered the cost of higher coverage levels. Biotechnology, GPS-based tools, biofuels and global trade also changed the decisions producers were making before the season began.

Crop Insurance and ProAg History, 1996-2005

The 1994 Federal Crop Insurance Reform Act set the stage for this decade, but the program began to change almost immediately.

In 1996, Congress repealed the mandatory participation requirement for crop insurance. Farmers who accepted certain USDA benefits still had to purchase coverage or waive eligibility for disaster benefits, but the program moved away from the strict requirement created under the 1994 law. That same year, USDA’s Risk Management Agency was formed to administer FCIC programs and support producer education around risk management.

The change showed up in the number of acres insured. By 1998, more than 180 million acres were insured under federal crop insurance, more than three times the acreage covered in 1988. By 2001, that number had climbed to roughly 210 million acres.

The Agricultural Risk Protection Act of 2000 (ARPA) was the next major step in the growth of crop insurance. The law increased premium subsidies, expanded access to revenue insurance and gave private companies more room to develop products for different crops, regions and production risks. It also added stronger program integrity measures, including measures to address fraud, waste and abuse.

For agents and producers, these changes mattered in practical ways. Broader revenue coverage, stronger subsidies and more product options gave producers better ways to manage risk tied to both production and price.

ProAg entered a new chapter in 2003 with the creation of Pro Ag Management, Inc., Producers Agriculture Insurance Company (PAIC) and ProAg® under the leadership of Jess B. Latham III. The timing matched a period of major growth in crop insurance acres, product options and private-sector delivery.

What Everyday Life Cost – 1996 Compared to 2005

Prices continued to rise during this decade, and farm families felt those changes in more than their household budgets. Fuel, equipment, housing and operating costs all affected how producers planned for the year ahead.

Purchased Item 1996 Price 1996 Price (Today’s $) 2005 Price 2005 Price (Today’s $)
Gasoline (per gallon) ~$1.19 ~$2.45 ~$2.24 ~$3.70
Milk (per gallon) ~$2.62 ~$5.39 ~$3.19 ~$5.26
Eggs (per dozen) ~$1.11 ~$2.27 ~$1.22 ~$2.01
Average New Car Price ~$18,600 ~$38,200 ~$28,400 ~$46,900
Median Home Value ~$140,250 ~$288,000 ~$236,550 ~$390,000

For farm families, household costs were only one part of the decade. The bigger financial questions often came from fuel, machinery, seed, land, rent, commodity prices and the cost of protecting a crop before the season began.

Presidents and National Leadership During the Decade

Two presidents led the country during this time when the economy grew, national security changed after September 11 and farm policy continued to shift.

  • Bill Clinton (1993–2001) served as president as the crop insurance changes of the mid-1990s were being implemented. His administration oversaw the creation of the USDA’s Risk Management Agency and signed the 1996 Farm Bill and the Agricultural Risk Protection Act of 2000.
  • George W. Bush (2001–2009) took office as the country entered a period shaped by Sept. 11, war, energy policy and changing global markets. His administration signed the 2002 Farm Bill, and the Energy Policy Act of 2005 created the Renewable Fuel Standard, which increased federal attention on renewable fuels.

Defining American Events, 1996–2005

Many events from this decade are still fresh in people’s memories.

  • The Centennial Olympic Park bombing occurred during the 1996 Summer Olympics in Atlanta.
  • Dolly the sheep, the first mammal cloned from an adult cell, was announced to the world in 1997.
  • Google was founded in 1998.
  • President Clinton was impeached by the U.S. House of Representatives in 1998 and acquitted by the Senate in 1999.
  • The Y2K transition arrived on Jan. 1, 2000, with far less disruption than many had feared.
  • The September 11 attacks in 2001 changed national security, foreign policy and daily life across the country.
  • The war in Afghanistan began in 2001.
  • The Iraq War began in 2003.
  • The Space Shuttle Columbia disaster occurred in 2003.
  • Hurricane Katrina struck the Gulf Coast in 2005.

Federal agricultural policy also changed during this period.

  • The Agricultural Credit Act of 1987 responded to financial stress in the Farm Credit System and farm lending.
  • The Federal Agriculture Improvement and Reform Act of 1996 changed farm income support by moving away from deficiency payments and using production flexibility contracts.
  • USDA’s Risk Management Agency was formed in 1996 to administer FCIC programs and support risk management education.
  • The Agricultural Risk Protection Act of 2000 increased premium subsidies and expanded the development of crop insurance products.
  • The 2002 Farm Bill continued farm support programs, including direct payments, counter-cyclical payments and marketing loans, while also including crop insurance provisions tied to quality loss adjustments, specialty crops and the Adjusted Gross Revenue pilot program.
  • The Energy Policy Act of 2005 created the Renewable Fuel Standard, increasing the role of renewable fuels in U.S. energy policy.

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Agriculture Adopts New Tools

By the late 1990s, technology was becoming part of more everyday decisions on the farm.

Genetically engineered crops were quickly adopted in U.S. production during this period. Herbicide-tolerant soybeans became available in limited quantities in 1996 and reached 87% of U.S. soybean acres by 2005. Cotton also saw rapid adoption, with herbicide-tolerant cotton reaching 61% of acreage and Bt cotton reaching 52% by 2005. The “Bt varieties” are genetically engineered to include genes from the soil bacterium Bacillus thuringiensis (Bt), allowing them to produce natural proteins that kill specific insect pests. In corn, Bt varieties accounted for 35% of acreage by 2005, focusing on traits targeting pests such as European corn borer and corn rootworm. The shift gave producers new weed and insect management options while also introducing new decisions regarding seed cost, trait selection and market acceptance.

Precision agriculture also began to provide producers with better field-level information. Yield monitors, GPS guidance and field mapping helped connect harvest results to specific areas of a field. Instead of relying only on whole-field averages, farmers could compare weaker-yielding areas with soil type, drainage, fertility, seed placement and input decisions.

Trade remained important to U.S. agriculture, and the beef industry saw how quickly one event could affect export demand. After Bovine spongiform encephalopathy (BSE – or more commonly known as mad cow disease) was discovered in the United States in December 2003, many countries restricted U.S. beef imports and beef exports fell sharply.

Energy policy also became more closely tied to agriculture. The Renewable Fuel Standard, created in 2005, increased federal support for renewable fuels and helped expand future demand for corn-based ethanol.

Crop Insurance Becomes Part of the Plan

By 2005, more producers were bringing crop insurance into their annual farm planning. Revenue products gave coverage a stronger connection to both yield production and price. Higher subsidies made stronger coverage levels easier to consider, while private companies had more room to develop products that fit different crops, regions and production risks.

Several changes helped move the program in that direction. The 1994 Reform Act broadened participation, USDA’s Risk Management Agency gave the program a clearer structure for administration and producer education and ARPA increased subsidies while supporting revenue coverage and private product development. As those changes took hold, insured acres continued to skyrocket.

During one of the most active periods of growth in federal crop insurance, ProAg reached an important point in its history during this decade. ProAg formalized the corporate structure, marking a new chapter in its growth. ProAg also defined its purpose, which has guided the company since 1926: helping American farmers and ranchers manage risk with dependable coverage they can count on when it really matters.

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