Why is Congress Targeting Crop Insurance?

November 30, 2015 11:00 AM
Why is Congress Targeting Crop Insurance?

Thanks to the 2014 farm bill, crop insurance has become an even more important risk management tool for farmers. So why is Congress going after this program again?

Here’s what Paul Neiffer, who writes The Farm CPA blog, says.

“Let’s go back to 2012,” says Neiffer. “It’s a classic example,” with the spring discovery price in the $4 range. Then came the drought. “Suddenly (the price) is up to $6, so the farmers—according to Congress, or some people in Congress—are being compensated for that extra $2 not due to a weather disaster, but due to a market premium,” he says.

That’s not what legislators expected or intended, so now they want to reconsider the program, according to Neiffer. “Some people in Congress are saying, ‘We really don’t want farmers to get an extra benefit from crop insurance. We want them to insure the cost that they put into the field (when they plant) … We don’t want them to get an extra benefit from the fact that the market price went up at harvest time.’”

Listen to Neiffer’s full comments here:

These lawmakers’ solution: Eliminate the harvest price option, which could provide a “big chunk” of the projected $24 billion savings in the latest proposal.

That’s not all they want to cut from crop insurance. The proposal also includes eliminating premium subsidies for farmers who make more than $250,000 and other trims.

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Spell Check

level dafield
sensible, NE
12/7/2015 06:41 PM

  It's time to level the field by getting rid of gov't programs, insurance, and the FSA--whose sole purpose is to suppress prices with bs reports. Let those who manage properly survive.

Langdon, ND
11/30/2015 04:36 PM

  They dont say anything about the price of fertilizer doubling because of the drought induced price rise! Fertilizer along with seed costs and machinery prices and repairs soared when that happened! So then how was the disaster plagued farmer suppose to keep up with that if he only recieved the lower spring price when the rest of agriculture that had a crop to sell made money?! A rising tide raises all boats doesnt it?

Mike H
weyauwega, WI
11/30/2015 04:56 PM

  The government programs only help you if you have a base. I as a small farm have 5% of my cropland that even has a base, on other acres you get no help whatsoever. And insuring just your inputs? When are people going to realize it costs 500 to 700 to even put a crop in the ground and the way the markets are you can make $400 to 500 back, which is a total loss. Farmers need living money too, sure the farmer has huge sums of money running thru his hands and keeps pennies of it if lucky.. Cut the money stuck into being a legislature.. why do they make so much and do so little??


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