After seven inches of rain fell over two days in late April, Dave Bohlmeyer was faced with the expense and hassle of having to replant some 80 acres of corn on his farm in Centralia, Mo.
It was not a hassle, however, to get his crop insurance claim filed. Bohlmeyer simply filled out the paperwork at the same time he ordered his replacement seed from his local MFA Agri Services in Centralia, where general manager Jim Gesling is an MFA Crop Insurance agent.
“I ordered seed corn and turned in the replant report—they did it all right there,” Bohlmeyer said. “I didn’t have to go anywhere or talk to anyone else. That’s just one example of how convenient it is to have crop insurance with MFA.”
MFA is new to the crop insurance business, launching a pilot program last fall with a wide range of risk management solutions for farmers. The program insures key crops in MFA country, including corn, soybeans, milo, cotton, rice and wheat. Livestock insurance will also be offered in the near future.
With crop insurance now the centerpiece of the U.S. agriculture safety net, most producers can’t farm without it, making this risk protection vital to their operations, said Jason Mott, retail credit manager for MFA Incorporated who helped oversee the implementation of the program.
“Crop insurance is essentially another farm input, and that’s what MFA does,” Mott said. “We already offer expertise in seed, fertilizer and crop protection, and we felt like we could add value by offering crop insurance as a resource for our customers. It creates a one-stop-shop atmosphere for our farmers.”
MFA employees like Gesling have taken on the role of crop insurance agents in addition to their existing responsibilities. The program began with 15 agents in the spring, who insured more than 24,000 acres. That response was considered successful enough that 25 more agents have been added this summer across the MFA system. All have completed the required training, testing and licensing to sell crop insurance through MFA.
“When MFA asked me to become an agent, I felt like it was a perfect fit—mainly because of my friends and customers like Dave,” Gesling said. “I know their operations; I know their families. We’ve worked closely together through the good times and bad times in agriculture. It’s a pleasure to get to serve them in this aspect of their business.”
MFA has also recently hired crop insurance veteran Mike Smith as principal agent to manage the program and help train agents with intentions of growing the business. With more than 27 years in the insurance industry—including crop insurance sales in MFA territory—Smith said he learned early that the guiding principles for success are speaking sincerely and acting in the customer’s best interest.
“If you are doing your best and are sincere about what you do, you’ll have people put their trust in you,” Smith said. “MFA customers have trust in MFA already. MFA crop insurance can benefit from that. Farmers know we have expertise and a support system behind us.”
MFA is working with AmTrust Ag, based in Leawood, Kan., to handle the risk management, underwriting and claims. AmTrust Ag is part of a well-established financial services company with a division specializing in multi-peril and crop hail insurance policies.
It was crucial to choose the right partner in this program, said Jerome Gerke, MFA corporate credit manager, who has also been leading MFA’s crop insurance efforts. AmTrust is one of 15 private-sector insurance companies that are currently authorized to sell and service policies through the Federal Crop Insurance Program. Only three are still American-owned, and AmTrust is one of those.
“That was important to us,” Gerke said. “We know AmTrust will have the best interests of the American farmer in mind, and that’s especially critical because the 2018 Farm Bill is expected to include big changes to crop insurance.”
AmTrust Ag focuses on quick communications, turnaround time and electronic processing and tracking of claims straight from the field. Its mapping tools simplify acreage reporting. But above all, the company emphasizes a personal approach to crop insurance, according to Chris Nesteby, AmTrust Ag’s account manager for MFA.
“This is not cookie-cutter crop insurance,” Nesteby said. “Crop insurance done right should be truly tailor-made for each farmer. MFA is making that happen. The average crop insurance agents for other companies probably see their clients two, maybe three times a year. MFA agents usually see their farmers weekly or more. The more involvement agents have with customers, the better they can provide protection.”
That type of service is exactly what convinced Bohlmeyer to choose MFA to provide crop insurance for his 500 acres of corn, soybeans, milo and wheat. The convenience is especially important because he also works a full-time job at Hubbell Power Systems in Centralia in addition to farming.
“I went through three agents in four years and never even met the last one,” he said. “I was looking for something closer to home. Well, you can’t get much closer than this. I stop by the MFA store here just about every day to get a cup of coffee and check the markets, so they can remind me when there are deadlines I need to meet. With the other company, I might get a phone call or find out there was something I should’ve done two weeks ago.”
For crop insurance agents, AmTrust provides materials to study for the state licensing exam. Once they pass the test, they must complete 12 hours of initial training followed by a competency exam. Continuing education is required each year with spring and fall updates in addition to training sessions planned by MFA and AmTrust.
“The crop insurance program evolves nonstop,” Nesteby said. “There are all kinds of new things that come down the pipeline from the government. We have to keep our agents up to date and continually help them refine their ability to provide the best service to the farmer.”
AmTrust provides “traveling” underwriters who will help MFA agents sit down and go over cropping plans and insurance policies. Company representatives have also been part of producer meetings to help foster a better understanding of what can be a complicated process.
“With the approach AmTrust has, I think we’re providing more information to producers than their agents have done in the past,” said George Kirchdoerfer, general manager of MFA’s River Hills Group, who is also licensed as a crop insurance agent. “If we keep proceeding in that direction, I think we’ll see good growth.”
MFA’s legacy of serving farmers and AmTrust’s experience in protecting farmers are a winning combination, Smith said.
“The support is there for this program,” he said. “We have quality people invested. Farmers will benefit from the fact that MFA retail locations are already part of their business. Our employees know and care about our customers’ operations, and that personal touch will make all the difference.”
For more information, contact your local MFA Agri Services. Each location has an agent available to work with producers on crop insurance needs for the upcoming year. The sales closing date for winter wheat in Missouri is Sept. 30 and for spring crops March 15, 2018.
Assurance through insurance
How risk management became a regulatory requirement on American farms
Although federal crop insurance has been around since the 1930s, authorized by Congress to help agricultural communities recover from the effects of the Great Depression and Dust Bowl, for more than half a century it was largely underused. Protection against natural disasters and market downturns was mostly done after the fact in the form of government bailouts, disaster payments and emergency loans.
Even as late as the early 1990s, crop insurance participation rates hovered in the 30-percent range, and Congress was often spending considerably more each year in disaster relief expenditures than it was on crop insurance. The Federal Crop Insurance Reform Act of 1994 restructured the program to boost farmer participation, increase the private sector’s role and create the USDA’s Risk Management Agency.
By 1998, more than 180 million acres of farmland were insured under the federal program, representing a three-fold increase over 1988. But coverage levels on a per-acre basis were still so low that Congress had not been able to break the habit of yearly ad hoc disaster bills.
Then, in May 2000, Congress approved the breakthrough piece of legislation: the Agricultural Risk Protection Act. Its provisions allowed farmers easier access to different types of insurance products, including revenue insurance and protection based on historical yields.
By the summer of 2012, more than 280 million acres were enrolled in crop insurance—just in time for historic drought. The 2014 Farm Bill made crop insurance the centerpiece of modern-day farm policy, replacing disaster packages and direct subsidy payments. Today, farmers must purchase crop insurance to be eligible for certain farm loans and government disaster benefits.
More than 90 percent of insurable farmland in the U.S. is now protected through the federal crop insurance program, which is delivered through a unique public-private partnership. Writing policies, marketing, adjusting and processing claims, training, record-keeping and other services are handled by private companies authorized by the RMA, which sets the rates that can be charged and determines which crops can be insured. The private companies are obligated to sell insurance to every eligible farmer who requests it and retain a large portion of the risk.
The federal government also subsidizes the farmer-paid premiums to reduce the cost to producers. In addition, it provides reimbursement to the private insurance companies to offset operating and administrative costs that would otherwise be paid by farmers as part of their premium. This helps crop insurance remain affordable to a majority of America’s farmers and ranchers. Still, farmers have paid $50 billion out of their own pockets for crop insurance since 2000.
In 2016, 1.2 million crop insurance policies were sold, protecting more than 130 crops on more than 290 million U.S. acres. Those crops had an insured value of $100 billion.
— Source: National Crop Insurance Services, cropinsuranceinamerica.org