Saturday, February 23, 2013

Farmer's insurance

I wish, when I mention "farmer's insurance," I were referring to the notion that at the very least we'll have food, if not a lucrative salary!

Sadly, I am referring to that giant structure we've created, that is mandatory in some circles, foolish not to get in others, but nonetheless, an additional expense that also dredges up the true complications of our highly legalized world. Insurance no longer feels like a friendly safety net for those times of loss, but rather a preventive measure we must pursue to avoid potential costs associated with our era of frivolous, out-of-control litigation.

I won't dither in our personal woes of trying to obtain insurance for our farm. Instead I'll comment on the broader problem I see happening in the farming world...

A little over a century ago, lots of people were in the farming "business." That is, many people managed their own diverse ecosystem with some crops in the ground and some livestock for meat, dairy and eggs. Then, along came a hefty movement, motivated in large part by two forces: industrialization and a growing population. Born out of this movement was what we now call "conventional farming," a practice of agriculture that creates monocultures. There's a spinach farm here, a broccoli farm there... a dairy farm here, an egg farm there. Farmers become specialized, species are separated. And this is a "good" thing, because, among other things, there is no contamination of plant species with animal manures. The public health community got behind it, the agricultural community got behind it, and the food-purchasing community got behind it, too.

Only now, after at least one generation grew up in a world where packaged, factory-produced food seemed safer and better that conventionally-conventionally (i.e., naturally and biologically) produced food, us farmers are reversing the trend. We are scared by the prospects of mono-cropping and have moved back to diversity. We want to grow a variety of vegetables. And we want to have some animals to supply ourselves with manure and compost. And we might even want to throw in some fruit and situate ourselves next to woodland so we can really be a part of our naturally diversified ecosystem.

But, our system of insurance now has to grapple with this change. Things were simple when you could insure a dairy farmer for everything that could go wrong with a dairy farm and didn't have to worry about that farmer "biting off more than they could chew." Now that you've got dairy farmers who also want to cultivate vegetables and go to farmers markets with their goods, insurance companies are taking pause (to put it nicely). They are starting to realize that they are entering into uncharted waters (that is, the insurance companies have never really had to insure mass amounts of diversified farms because they've become accustomed to the ease of specialization; not that diversified farms are uncharted) and they don't know how to distribute the risk. And this is what they are in the business of.

So instead of distributing risk, running new algorithms, problem-solving how to safely insure this growing movement of small-scale, diversified, biological and organic farms, they are dropping farmers' coverage. Farmers who have paid their premiums and retained policies for years are receiving calls from their insurance companies informing them that they are no longer being granted the "safety net" of insurance.

I interpret this as insurance underwriters being scared of litigation and having to pay out huge sums of money that they had not hedged on before. As new methods for "regulating" these small-scale diversified farms are under development and old ones are being modified (e.g., GAP guidelines), farmers have to struggle to keep up. Or some might choose to ignore. But whichever the case, the potential for increased litigation in an era of chickens living next door to spinach and tomatoes is playing itself out now.

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