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The Case for Crop Insurance


On our farm, many of the best management decisions we’ve made during this downturn have centered around voluntary conservation practices. In lieu of trying to raise higher-risk cash crops on our marginal acres, we’ve been converting those areas to alfalfa or grass, depending on what works best in each situation.

It might chop up the farm a bit and make fieldwork more cumbersome, but it also has some benefits that have worked for us. During the spring and summer, it keeps us busy with planting, mowing and raking; and also lets us generate revenue at a time of year when it can be scarce.

At harvest, these areas where we used to see the yield monitor dip down are no longer part of the average, and yields go up. Over the course of several years, the impact this will have on our average production history (APH) will allow us to protect more bushels of our production.

In the short term, this was an expensive strategy. To start, we didn’t have any hay equipment. We didn’t even have a drill that could properly plant the fluffy-seeded grasses native to South Dakota. (I’m sure everyone reading this is aware that farm equipment isn’t cheap.)

Alfalfa and grasses are crops that you hopefully only have to plant once, but seed is expensive, and the establishment cost is all up-front.

That said, it’s something that we feel good about in the long term, not just because of the economic benefits, but because of the positive impact we can have on water and soil quality, wildlife habitat and biodiversity. All of these expected benefits are predicated on the idea our farm will be around for a long time, allowing us and future generations to enjoy them. If our safety net were to be compromised, how confident would we be in our ability to make the next change and see it through to success?

Many environmental groups are not big fans of the farm safety net. More specifically, they feel the government subsidy of crop insurance leads to farming marginal lands that would be better suited as wildlife habitat. If farmers had to take on more risk, they argue, farmers wouldn’t be so willing to plant that extra couple acres on their farm, which they would view as a good thing. In the discussions around the next farm bill, these groups will again be making the case that farmers should shoulder even more risk than they currently do.

What often aren’t mentioned in their pleas to lawmakers and the public, are the conservation compliance requirements that continue to be tied to participation in the farm program. These requirements ensure that huge numbers of farmers in the United States are meeting or exceeding conservation goals set forth in their contract with the taxpayer. If the incentive to participate in the program were to be reduced or disappear, our obligation to rules like Tom Daschle’s ‘Swampbuster’ would also be gone. If that were to lead to the drainage of more wetlands, the environmental groups would probably feel as though they had shot themselves in the foot.

Furthermore, I think the more risk you push onto farmers, and the closer their bank account balances are to the bandsaw, the more they are going to feel like they need to wring every cent they can out of their acres.

Insurance takes stress and risk off the farmer, and the land simply doesn’t have to be worked as hard as a result. The more stress and risk that farmers are under, the harder it becomes for them to think long-term.

The public needs to hear this side of the story. The American people demand a secure food supply, and robust environmental protections. Let’s make sure they know they already have both because of their social contract with farmers, and that maintaining the farm safety net relates directly to their priorities.

Note to the reader: This column was originally published in the March/April 2018 issue of South Dakota Soybean Leader a publication of the South Dakota Soybean Association, access a digital copy of this magazine at www.sdsoybean.org.

Brandon Wipf is a farmer from Huron, South Dakota and an American Soybean Association Director.

Source: Morning Ag Clips

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