What do Prairie Grains farmers have in common with Tina Turner? 

Like Tina Turner, farmers insure their assets. Unlike Tina Turner, farmers don’t insure their legs; they insure the crops they grow. 

Between Mother Nature’s curveballs and unpredictable market fluctuations, farmers face an abundance of uncertainty and risk. Author Amor Towles wrote that farming, “was a way of life in which the difference between abundance and ruin could be measured by a few inches of rain or a few nights of frost.” That’s why crop insurance is critical. 

“Crop insurance has been part of the evolution of our agricultural support system in the United States,” said Kyle Jore, head of crop insurance development for Watts and Associates, a firm that develops and demonstrates data-driven risk management strategies for agricultural leaders. “It ensures that we have resilience in agriculture, which largely funds our rural economies.” 

While the first crop insurance agency can be traced back to a group of tobacco farmers protecting against hail damage in the 1880s, federal crop insurance began as an experiment in the 1930s to help agriculture recover from the Great Depression and the Dust Bowl. Today, with more than 90 percent of insurable farmland in the U.S. protected by the federal crop insurance program, it has developed into a complex system that aims to alleviate a grower’s financial burden when elements out of their control enter the picture. 

“With how expensive farming is now, from machinery to land to everything else, farmers are using a lot of money to grow crops,” said Chris Engelstad, past president of the National Barley Growers Association (NBGA). “And then, with all the volatile weather, cost of inputs and commodity prices, it’s tough to handle all that year to year. Crop insurance is the backbone that allows us to take risks every year.” 

Like agriculture, crop insurance has evolved over time, adapting to the needs of producers. In 1980, the Federal Crop Insurance Act of 1980 was passed, expanding the crop insurance program through a cost-share with farmers that could deliver assistance in a timely manner. This endeavor enabled policymakers to shift away from the direct payment system that had previously been a mainstay for disaster assistance. In 2024, Minnesota farmers paid $332.6 million dollars to protect 18.1 million acres, and in North Dakota, producers paid $409.3 million to insure 26.5 million acres. 

“It’s structured so that producers have to have skin in the game, in their own risk management,” said Jore, who farms near Thief River Falls, Minn. “They have to pay something and choose how much risk management they want, and what they want. As a result, producers have a tremendous number of tools that they can use and tailor to their business.”  

Today, that toolbox is chock-full of insurance plans spanning across 136 different crops and offering 36 different plan options for producers. Multiple peril crop insurance (MPCI) policies protect farmers from a myriad of losses, such as natural causeslike drought and disease, with newer coverage options including yield and price protection which shields growers from loss in revenue. Overseen by the USDA’s Risk Management Agency, MPCI must be purchased before planting, and private companies must sell to any eligible farmer interested and retain a large portion of the risk. Farmers also have the option to purchase crop-hail policies, which aren’t part of the Federal Crop Insurance Program, and can be purchased at any time during the growing season.  

“Crop insurance doesn’t make you whole, but it gives you peace of mind,” said Engelstad, who farms near Fertile, Minn. “It makes sure that we have stability on our farm and can keep going from year to year. Otherwise, the risks can get you really fast and take you from a profitable year to being completely upside down in an hour.” 

Working together 

A crucial aspect of crop insurance is the symbiotic relationship between the public and private sector. While government programs are notorious for being slow to deliver assistance, private companies can help growers in a much timelier manner, often within 30 days. An adeptness that makes a significant difference when farmers are trying to stay afloat, this partnership brings together the efficiencies of a private-sector delivery system with the regulatory and financial support of the federal government. 

“Private companies compete on service, which means that the farmer wins,” said Jore, who participated in the Ag Leadership Network, a joint program between the Minnesota Association of Wheat Growers (MAWG) and Minnesota Farm Bureau. “One agent might answer the phone right away or get ahold of the adjuster and gets them out there as soon as possible. Maybe a certain agent understands all the different types of programs and the different options well and can communicate to the farmer in a way that they appreciate.” 

To protect the integrity of the system, private crop insurance companies cannot proceed without checks and balances. Championed by Tim Watts, founder of Watts and Associates, section 508(h) of the Federal Crop Insurance Act allows private parties to develop products that are in the best interests of producers, follow sound insurance principles and are actuarially appropriate.  

“Private entities can build a new crop insurance program and propose it to the board for a rigorous review process,” Jore said. “The FCIC Board, through guidance from college professors and actuaries, will look through it, make sure it’s sound and that there are no major underwriting flaws that they can tell. If it goes through this rather rigorous process, it can be implemented as a new crop insurance product.” 

Voices carry 

Membership groups, like MAWG and NBGA, are instrumental in retaining and enhancing the crop insurance program. Because so many factors impacting crop insurance are set by federal policy, it’s imperative that farmers have a voice at the table. 

“Joining and being active in producer groups really helps individual farmers because they can group together with peers and advocate for things that will help them on their own farms,” Engelstad said. “They keep their fingers on the pulse of everything that’s going on that is affecting farms, including crop insurance. They’re there to help right away when they need to be either proactive, like creating new crop insurance tools, or even when something unforeseen pops up.” 

And, sometimes, it’s just as important to defend what’s working, protecting the policies against opinions that don’t understand the intricacies of the crop insurance program. 

“Producer groups want legislators to know that they like crop insurance and that it’s working for them,” Jore said. “Other people might say, ‘Hey, look this thing costs a lot of money,’ and might try to make changes to the program, so they bring it up because they want to preserve the way that it’s already working really well.”  

When advocacy groups meet with legislators to stress the importance of a strong crop insurance program, they aren’t just shouting into the wind. Their efforts go a long way and often lead to real change. 

“A big win for barley was when they added the malt barley endorsement to crop insurance,” Engelstad said. “There’s a big price difference between feed barley and malt barley, and there are really specific specifications to make malt quality. If you don’tmake the quality, you drop down almost half the price making it almost unprofitable to grow barley. The malt barley endorsement helps bridge the gap.” 

Each year, farmers buy more than 2.4 million crop insurance policies, protecting more than $200 billion worth of crops and livestock. It’s an essential component to the agriculture industry, with many nuances affecting its efficacy, and grassroots membership organizations play a pivotal role in ensuring that it remains effectual. 

“Crop insurance allows farmers to take on the risks that come every year,” Engelstad said. “In turn, that helps make a robust supply of crops for all people, for affordable food and quality food. And it helps stabilize markets and gets food and supplies to all people that are in and outside of agriculture because farmers comprise a very small percentage of the U.S. population.”