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FOR
IMMEDIATE RELEASE
NATIONAL CORN GROWERS ASSOCIATION
Gary Bradley, NCGA, 636-733-9004
Rhondalee Dean-Royce, NCGA, 202-628-7001
NCGA Survey: Corn Growers Consider Crop Insurance Key Tool in Risk
Management
WASHINGTON (March 23, 2004) -- Corn growers consider crop insurance
one of their most important tools to manage risk, according to the
results of a survey announced today by the National Corn Growers Association
(NCGA). The Risk Management Tools Survey was conducted by Promar International
and Forward Research.
More than 800 corn growers, geographically dispersed among the east,
central and west regions of the U.S. Corn Belt, participated in telephone
interviews on their risk management practices. NCGA commissioned the
survey to gain a better understanding of how growers make risk management
decisions and to gather feedback on how to improve the selection of
federal crop insurance policies and other risk management products
that are currently available in the private sector.
“NCGA is taking a proactive role in crop insurance and aiding
corn growers with a better understanding of risk management,” stated
Ron Litterer, chair of NCGA’s Public Policy Action Team. “This
survey will ultimately aid our members in their decisions to use crop
insurance products and other risk management tools, depending on their
individual needs.”
Several significant findings from the NCGA survey include:
- Corn
growers consider crop insurance one of their most important tools
to manage risk, and 91 percent of those
interviewed purchase
it.
- Growers have many other strategies for managing
risk as well, although 30-40 percent still do not use any type of
forward contracts.
- Among crop insurance users, 62 percent buy
revenue insurance, 53 percent private hail insurance, 50 percent
catastrophic policies,
40 percent buy-up multi-peril and 8 percent group risk.
- Growers are moderately satisfied with crop
insurance products. Overall, private hail insurance scored highest
and the basic catastrophic
coverage (CAT) policy scored lowest.
- 30 percent of farmers have submitted loss
claims in consecutive years. In the West, 60 percent of crop insurance
users reported experiencing
it. But there was no difference in degree of satisfaction with indemnity
payments.
- The two changes that farmers said would boost
their use of crop insurance are reduction in cost and premium discounts
for good
claim experience.
- There was also strong support for a premium
discount for having fewer prevented planting claims.
“This survey affirms what corn growers have known for years
- crop insurance is becoming a more critical risk management tool in
their farm operations,” Litterer said. “NCGA will continue
to work for improvements in existing products and the development of
new policies that better meet the diverse needs of growers across the
Corn Belt. With agriculture disaster assistance becoming more uncertain
every year, we want to make sure the federal crop insurance program
is strengthened and positioned to offer farmers and ranchers affordable
protection against weather related catastrophic losses.”
The federal crop insurance program over the past decade has become
a much more important component in the farm safety net. In addition
to expanding the program for livestock and other commodities, the Agriculture
Risk Protection Act of 2000 increased the percentages of cost share
assistance for growers to purchase federal crop insurance, resulting
in a significant increase in participation and a dramatic shift toward
higher levels of coverage Still, major field crops such as corn account
for the bulk of the crop insurance program.
In 2002, four crops accounted for 74 percent of total
premium revenue – corn,
soybeans, cotton and wheat. More than 90 percent of premiums were attributed
to either the standard multiple peril policy or one of the three farm-level
revenue insurance policies. The remainders were associated with either
area-based yield and revenue products or policies on specialty crops.
The survey is available online at www.ncga.com.
The National
Corn Growers Association mission is to create and increase opportunities
for corn growers in a changing world and to enhance corn’s
profitability and usage. NCGA represents more than 33,000 members,
25 affiliated state corn grower organizations and hundreds of thousands
of growers who contribute to state checkoff programs.
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