By Ashley Rice
Jeff Kirwan of New Windsor, like many farmers, has faced a number of challenges in recent years — trade wars, flooding, supply chain disruptions because of COVID and a derecho.
"Never in recent memory nor in my farming career, has agriculture become so reliant for such an extended period on emergency assistance," Kirwan testified during a U.S. House Agriculture subcommittee hearing. "While we might not always express it, farmers greatly appreciated the efforts of Congress and USDA over the past three years to address the magnitude and cumulative impact caused by each of these natural and economic disasters."
The Mercer County farmer, who also serves as Illinois Farm Bureau District 3 director, also explained how crop insurance is the cornerstone of his operation.
"Our ability to market our grain, manage our risk, assume risk and financially survive depends on crop insurance," he said. "Hundreds of thousands of dollars invested in a growing crop can be wiped out in one weather event.”
On top of crop insurance, the Coronavirus Food Assistance Program, Wildfire and Hurricane Indemnity Program Plus, and the Market Facilitation Program all have allowed farmers to pay bills and continue producing.
"Through it all, the farm safety net, ARC and PLC (Agricultural Risk Coverage and Price Loss Coverage), also played a key role in keeping farmers afloat," added Kirwan. "But in the absence of ad-hoc disaster assistance, there’s no question those programs and the timing of payments were simply not designed to address extraordinary economic and weather-related disasters.
"There needs to be a review of these programs, and farm organizations need to be part of that conversation."
According to the Economic Research Service, net farm income fell from a high of $140 billion in 2012 to an average of $74 billion from 2016 to 2019. Incomes then rebounded to a forecast of $123 billion in 2020.
"Trade disputes and weather issues along with high yields contributed to abundant supply which led to these lower incomes," testified Gary Schnitkey, agricultural economics professor at the University of Illinois. "Without the federal safety net, farm incomes would have been much lower. Payments for farm safety net programs and net insurance payments were 20% of net income in 2018, 33% in 2019 and 59% in 2020."
But so far, 2021 net farm income is looking up — a welcome change.
"Many commodities have had higher prices since late summer 2020 and income looks good in 2021," added Schnitkey. "This more robust outlook differs from what many, myself included, would have expected last year at this time, illustrating how situations can abruptly change in agriculture."
The U.S. House Subcommittee on General Farm Commodities and Risk Management, which is chaired by Rep. Cheri Bustos, D-East Moline, also asked witnesses about the current widespread droughts, how to improve crop insurance, the timing of program payments and what resources they utilize.
This story was provided by FarmWeekNow.com.