Insurance important for farmers

It would be nice to talk about the great drought of 2012 in the past tense, but unfortunately, the entire state of Missouri remains in drought.

But if Missouri's farmers hadn't purchased a crop insurance policy last year -- as most do every year -- they could have lost more than their crops. They could have lost their farms, or their life savings, which is why crop insurance has become the primary risk management tool for farmers across the country.

Crop insurance is a modern-hybrid risk management tool. It's a public-private partnership whereby farmers purchase insurance -- partially underwritten by the federal government -- to cover crop losses. Policies are sold, serviced and delivered by the private sector, and when disaster strikes, the private sector covers part of the cost.

The policies are purchased by each individual farmer, like me -- ensuring that we have "skin in the game" -- and that the coverage is tailored specifically to each farmer's crops, land and comfort with risk. This year alone, farmers like me spent more than $4 billion out of our own pockets to protect our crops.

Before crop insurance was widely available, natural disasters like this drought would have likely triggered a very costly, unbudgeted ad hoc disaster bill from Congress. Such bills cost taxpayers $45 billion from FY1989 to FY2001.

What tomorrow holds for Missouri's farmers, nobody knows. But we are a resilient lot, with faith in our work ethic, trust in our risk management tools and the never-ending hope for more rain.

Sincerely,

DAVID BREWER, Charleston, Mo.