The Numbers Don’t Lie


I’m not going to make fun of actuaries because they’ve just done farmers a huge favor: Those of us who plant certain kinds of genetically enhanced corn are going to get a break on our crop insurance.

And why shouldn’t we? Auto-insurance companies routinely offer safe-driver discounts to motorists who have a history of steering clear of trouble. Farmers who use the best seeds that modern technology has to offer are like agriculture’s safe drivers–and giving us a reduction on our insurance premiums makes sense.

Right now, the discounts will apply only to a particular type of corn planted in Illinois, Indiana, Iowa, and Minnesota. In future years, however, it’s almost certain to apply to more varieties of crop and in more places.

This could be the start of something big–a new and creative development that adds even more incentive for farmers to use biotechnology.

Why would actuaries approve such a plan? Because the numbers don’t lie! Farmers who plant genetically enhanced crops are more likely to have good yields and less likely to suffer losses. In other words, they pose less of a risk for insurers. To attract their business, the crop-insurance industry has come up with an innovative plan that rewards GM-using farmers for their responsibility.

Farmers purchase these policies from private insurance companies, but they are approved by the United States Department of Agriculture. “We are making the discount available because the corn has shown the traits necessary to reduce the risk,” said Shirley Pugh of the USDA’s Risk Management Agency, in the Chicago Tribune.

Again: The numbers don’t lie.

Some critics of GM foods have claimed that biotechnology doesn’t help anybody but big biotech companies. They charge that farmers are duped into buying more expensive seeds that don’t deliver real benefits. That’s sheer nonsense, as just about any farmer who has planted GM crops can tell you.

But if you don’t want to take farmers at their word, just listen to the actuaries. They’ve taken a characteristically cold, hard look at the realities of biotechnology. They’ve concluded that just as insuring safe drivers is less risky than insuring Evel Knievel (may he rest in peace), insuring farmers who plant GM crops is less risky than insuring those who don’t.

As recently as a decade ago, a lot of farmers did not use crop with insurance. I was one of them. It was simply too expensive and the kinds of policies available did not fit my needs. Those who did buy insurance simply wanted some protection from catastrophes such as a crop-killing drought.

Since then, however, insurance policies have become much more sophisticated and common. They can guard not only against major calamities but also declining prices. To return to the auto-insurance example, farmers can defend themselves against everything from gigantic smash-ups to the agricultural equivalent of fender benders.

Due to this diversity of policies, crop insurance has become much more attractive–so much so that I’ve started purchasing it for my farm. It just makes good business sense. Farming is inherently risky, and I appreciate the opportunity to reduce my risk.

We’ll have to wait until March before we know exactly what the new biotech-friendly insurance policies will cost–and how much farmers who purchase them are likely to save in 2008. That’s when I’ll make my own decision.

In the meantime, I appreciate that I’ll have more choices about insuring my crops–and grateful that actuaries are going to make life on a farm just a little bit easier.

John Reifsteck, a corn and soybean farmer in western Champaign County Illinois, is a Board Member of Truth About Trade and Technology (

John Reifsteck

John Reifsteck

John Reifsteck operates a corn and soybean farm in western Champaign County, Illinois. He served on the Global Farmer Network Board of Directors, and is a former Chair. John currently serves as Chairman and President of the GROWMARK Board of Directors-a farm supply and marketing cooperative that operates principally in Illinois, Iowa, Wisconsin and Ontario.

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