By Christy Seyfert, Federal Government Relations Director
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As Wells Fargo's federal government relations director focused on agriculture, I have recently spent a lot of time on Capitol Hill discussing the 2013 Farm Bill. Reauthorized approximately every five years, the Farm Bill is a comprehensive piece of legislation that provides the legal framework for much more than just farm programs. It reauthorizes conservation, research, energy, and nutrition programs such as the Supplemental Nutrition Assistance Program (food stamps). One of the key programs in the 2013 Farm Bill is crop insurance, a federal program delivered by the private sector.
Although crop insurance is permanently authorized by separate statute, the 2013 Farm Bill contains amendments to the federal crop insurance program. Calling crop insurance the centerpiece of federal farm policy, policymakers have included crop insurance enhancements for producers of all crops, from traditional row crops to specialty crops and livestock. Crop insurance is not only critically important for farmers, ranchers, lenders and agribusinesses, it is also important for consumers. At an estimated taxpayer cost of about 2.3 cents per meal, crop insurance allows farmers and ranchers to produce an abundant and affordable food supply for a growing world population. Global food demand is expected to increase 70 percent by 2050, and crop insurance helps farmers and ranchers secure financing to produce each year.
After the devastating 2012 crop year, policymakers and stakeholders quickly realized the importance of crop insurance in allowing farmers experiencing deep losses to pay financial obligations, secure operating loans for the next year, and return to the fields. In the 2013 Farm Bill, Congress answered the calls of farm groups to enhance crop insurance and create additional coverage opportunities. Importantly, these enhancements occur at a time when overall agricultural spending in the 2013 Farm Bill is reduced significantly.
Over the last 15 years, acreage protected by crop insurance has increased from 181 million acres to 292 million acres today. Liability and total premium have also increased. Crop insurance represents the second largest budget baseline at the U.S. Department of Agriculture, behind nutrition programs. As crop insurance has grown in size and importance, the threats have expanded as well and unfortunately have been very real.
One such threat is proposed linkage of means testing with crop insurance. For two years, the U.S. Senate has approved such an amendment and broad alliances of stakeholders and financial services providers have fought these efforts on Capitol Hill. Whether a farmer or rancher is a commercial-scale producer or one who specializes in niche markets, crop insurance is an important component of responsible risk management. Crop loss will occur in some part of the country each year, and disaster will not discriminate based on farmer size, crop produced, or financial health of the farming operation. While the goal of means testing proponents may be to target the "big guys," supporters give little consideration to the unintended consequences. These include a likely buy-down of coverage or exiting the program, increasing rates on those retaining crop insurance, and increasing calls for ad hoc, off-budget disaster assistance.
Threats to private sector delivery of crop insurance also arose during the Farm Bill debate in the form of amendments to reduce delivery reimbursements, and those efforts were defeated in both the Senate and House of Representatives. The recent government shutdown showed the value of the private sector's involvement in program delivery. Farmer claims continued to be submitted even though non-critical government operations had ceased. Yet, private sector delivery provided uninterrupted service during this time.
Although threats exist, crop insurance has a bright future and will remain a key component of farmer and rancher risk management portfolios.
Christy Seyfert is Wells Fargo's government relations director representing the interests of Rural Community Insurance Services (RCIS) and Wells Fargo agribusinesses. Seyfert has spent 15 years assisting members of the U.S. Senate, the U.S. House of Representatives and private sector clients with agricultural, food and beverage, and finance interests.
Prior to joining Wells Fargo, Christy worked for Michael Torrey Associates were she coordinated government affairs and assisted in managing the Crop Insurance and Reinsurance Bureau, (CIRB), a leading international crop insurance trade association comprised of insurance companies and the reinsurance community. Christy also has worked as Senior Professional Staff of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry and the U.S. House Committee on Agriculture where she developed and negotiated legislation important to the agricultural community, including crop insurance improvements and commodity programs.
Christy is a sixth-generation farm girl and holds a Bachelor of Science in Agriculture, Food Science from The University of Georgia.
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