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RSS By: Kevin Van Trump, AgWeb.com

Kevin Van Trump has over 20 years of experience in the grain and livestock industry.

Details On Proposed Bill To Reduce Crop Insurance Subsidies

Mar 07, 2013

  

Senator Jeff Flake, Arizona Republican, said yesterday, "The crop insurance program has turned into a huge taxpayer-funded boon for some of the biggest, multi-national insurance companies and multi-millionaire farmers. In a time of record deficits and an incomprehensible $16.5 trillion in debt, this program can no longer be justified in its current form." In response Senator Flake is introducing legislation that will save taxpayers $40.1 Billion by "REDUCING" Federal Crop Insurance Premium Subsidies! It was introduced in Washington yesterday as the "Crop Insurance Subsidy Reduction Act" (S. 446) in order to significantly reduce the amount of taxpayer dollars used to subsidize crop insurance. S. 446 returns federal crop insurance premium subsidies to their pre- Agriculture Risk Protection Act (ARPA) levels. Basically the new proposal being presented in Congress want to increase the farmer’s share of the premium from 38% to 62% of the premium. I should also note Republican Representative John Duncan of Tennessee, has introduced a similar consumer tax savings bill. To say they are gunning for this program is an "understatement." My argument is, sure the government paid out billions to pay for crop insurance claims, but with 80% of the nations farmers participating and paying big premiums, how much would we have had to pay out as a nation "IF" there was no insurance? You can't tell me billions in "disaster aid" would not have been paid out following one of hottest, driest summers ever on record! It was a national disaster or huge proportions. Hurricane Katrina cost the county billions and billions, and there was no "hurricane insurance" being paid into the government by the people of New Orleans who running around in the streets looting businesses following the disaster... Still the government paid out billions! My guess is as the politicians in Washington attempt to "fix" another problem, they will only create one that is much more dangerous, i.e. "gun control," "distribution of wealth," "social security," medicare," "medicaid," etc... Before long we they will be trying to discourage US farming, like we did with US energy production years back. Then we will be held captive to foreign crop production, like we have been held captive to foreign oil. Hope this isn't how it goes down, but as you know they generally take aim at those standing atop the financial hill. As those in the Ag industry make more money I suspect the powers that be in Washington will continue to look for ways to pull back their reins.
 

 

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COMMENTS (1 Comments)

TOM - KENNEWICK, WA
I recently read that the amount paid out in claims has been the same as has been paid in over the years, and I seem to remember that that didn't count the 60% paid in by the government.

If that is true it means that the insurance companies not only got to hold the money and collect the interest, but that the 60% they got from the government they got to keep.

If that is true then the government could cut their share from 60% to 15% and the insurance company would still be keeping 15% above the pay-out.

Or the government could get out of it all the way and offer instead an income tax credit of up to $20,000 to corps, partnerships, or persons, who pay for private crop insurance which they back for a fee (like how they back your bank for a fee).

Then it would become competitive, the government wouldn't have to pay for it, the government would never get stuck with a huge disaster relief problem, and it would put a limit on how much was going to very large corporations which always strikes people as faintly shady when a movie star gets government money and so forth.

As a reduction in the amount the government takes it cannot be called welfare, it will take no interference from the government and so will become just another efficient hardworking part of the agriculture community that works on weekends and after 5pm.

10:34 AM Mar 8th
 

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