Crop Insurance: A Key Risk Management Tool for Northeast Agricultural Producers

Enfield, CT and Cortland, N.Y. – Farm Credit East and Crop Growers, LLP released data today illustrating the critical importance of crop insurance as a risk management tool. With an early spring freeze, followed by a summer drought, crop insurance was a key risk management tool for farmers in 2012.

In 2012, the indemnity payments for Crop Growers, LLP customers’ in their nine state territory (CT, MA, ME, NH, NJ, NY, PA, RI & VT) exceeded $39 million. The significance of these payments go well beyond the farm gate, covering input costs and replacing income that would have been lost due to not producing a crop. These funds encourage additional investment on the farm, while supporting the local agricultural infrastructure, local economy and job force.

Key northeast trends in crop insurance participation:

  • In 2012, farmers insured 2.6 million acres in the northeast with $1.4 billion in protection. While in 2000, farmers insured 1.8 million acres with $500 million of protection in force.
  • Northeast farmers have improved their risk management plans by moving to more revenue policies: In 2012, 1.3 million acres were insured under a revenue policy, whereas in 2000, 352 thousand acres were insured using a revenue plan of protection.

“Northeast farmers recognize the investment and risk associated with today’s agriculture,” said Jeremy Forrett, Farm Credit East/Crop Growers, LLP vice president. “By developing risk management plans that include crop insurance, they mitigate the risk and position their farm businesses for a sustainable future.”

Crop Growers, LLP is owned by Farm Credit East, Yankee Farm Credit, AgChoice Farm Credit and Farm Credit of Maine. Over the past 13 years Crop Growers, LLP has developed risk management plans for northeast farmers that have responded to weather and market related crop losses by paying indemnities in excess of $180 million.