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C r o p I n s u r a n c e
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The Road Before Us
and the Seven Bridges
As this note is being penned, both internationTom
Zacharias, NCIS President
A fundamental characteristic
of today's crop insurance system
is its incentive-based structure.
The federal crop insurance
program is a model for the use
of incentives in achieving both
policy and business objectives.
al and economic conditions are extremely uncertain,
to say the least, and it is unclear what the state
of the world will be when this issue of TODAY®
lands in your inbox. Despite this, we can only control
what we can control. For crop insurers, that
means remaining steadfast in our service to the
American farmer and helping them navigate the
hills and valleys of the road before us.
The road behind has not been without its
speed-bumps. It was essentially two years ago that
many of us, certainly not all, left our offices and
" recalibrated " our lifestyles. For crop insurance,
the industry, along with RMA, forged the road
before us and found not necessarily new ways of
doing business but engaged previously underutilized
technology to serve our customers. In 2020,
the industry and RMA met the challenge of the
pandemic, the Midwest derecho, the hurricanes
in the Southeast as well as the routine hardships
that come with any crop season. In 2021, drought
continued to plague farmers across the northern
plains and most of the west while the third active
hurricane season on record flooded farmland
from Louisiana to the eastern seaboard. That was
then, this is now.
At the recent USDA Outlook Forum, I was
asked what I see as the greatest challenge facing
our industry. Given the recent turmoil in global
and economic events, it would have been impossible
and even fool hearty to speculate or prognosticate.
My response was not a development of
alternative farm policy and economic scenarios.
Rather, I responded through the " lens " of how to
view and forge the road before us to meet the challenges
we will face in the future.
For crop insurance, the road ahead requires us
to traverse mountains and valleys as well as crossing
more than a few raging rivers. It will prove
most beneficial to have more than a few strong and
sturdy bridges as we forge ahead. That said, our
" lyrical miracle " for this " homily " is none other
than the " Seven Bridges Road " originally written
and sung by Steve Young and made popular by the
Eagles harmonic cover. We have crossed many of
these " bridges " in the past and several of them will
be familiar. It is safe to say we will have the opportunity
to cross these " bridges " again.
Bridge One: Availability
Availability, along with participation, touches
on several things. While some might traditionally
associate crop insurance with row crop production,
there are policies available for more than
130 different commodities. These policies can be
tailored to meet the individual needs and risks of
each farmer. If one measures insurance coverage
of acres planted to major crops, crop insurance
covered 221 million acres out of 254 million total
planted acres in 2021.
And if one counts all crops, crop insurance insured
more than 462 million acres in 2021, providing
$137 billion dollars in protection. That's more
than 90 percent of insurable farmland in America.
Availability and participation equate to both
spread on risk, which aids in actuarial soundness,
and affordability of the insurance system. It will
also be vitally important to ensure that crop insurance
is available to all. The industry has supported
outreach initiatives and funded a scholarship program
for many years. That said, there is still much
work that needs to be done to improve both availability
and participation by all.
Bridge Two: Affordability
During a recent House Agriculture Committee
hearing on the Farm Bill, which is due
for reauthorization in 2023, Brad Doyle from the
American Soybean Association stated that " Crop
Continued on page 48
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