“This is probably the most challenging year for crop insurance in a very long time,” warned Mary Kay Thatcher of the American Farm Bureau Federation.
Farmers already concerned about the grain markets and the market price for crop insurance need to add a new worry to their lists in 2015: federal support for crop insurance.
“This is probably the most challenging year for crop insurance in a very long time,” warned Mary Kay Thatcher of the American Farm Bureau Federation. Thatcher, the organization’s senior director for Congressional relations, gave her remarks Thursday at the Crop Insurance and Reinsurance Bureau’s annual meeting in Florida.
What makes this year so tough? Politics and money. There’s a new set of legislators in Congress, and they want to cut costs. Lawmakers from suburban and urban districts don’t necessarily understand the rural economy and the impact of commodity markets and weather events on farmers.
Compromise and bipartisanship--which has always been critical to the passage of farm bills in the past—continues to erode. “We are at the point where we have redistricted so many times that we have very few districts up for grabs anymore,” Thatcher explained. “They are either a totally Republican district or a totally Democratic district.”
That’s worrisome because lawmakers in the new Congress have already started making noise about saving money by breaking apart the various pieces of the farm bill—commodity programs, subsidies for crop insurance subsidies, conservation, and the Supplemental Nutrition Assistance Program (SNAP) also known as food stamps.
“How in the world would we ever pass another farm bill through the House of Representatives if that happened?” asked Thatcher.
She noted that separating these programs could also expose crop insurance subsidies to criticism and cuts, perhaps sooner rather than later. “Crop insurance is a big chunk of the farm bill if you remove nutrition,” warned Thatcher, who noted that premium subsidies have been immune from cuts since 1980.
That could change soon as legislators look for savings wherever they can. “Farmers are going to be the ones looked at for cuts this year,” she predicted.
The possibility worries her, given the current state of commodity prices and the fragile financial state of many smaller producers. "We have so much ending stocks in the world," she says. "There is no way the price [for grain] can go up. It has to go down."
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