Tomorrow, February 12, 2015, Senator Jeff Flake (R-AZ) and Representative John Duncan Jr. (R-TN) will introduce legislation pertaining to the Harvest Price Option (HPO) available for most revenue crop insurance programs. The HPO allows for a claim when prices are actually higher than the initial discovery price. For example, during the 2012 drought, having this option added about $6 billion to the cost borne by the taxpayers and President Obama's budget proposes eliminating this option and this legislation would also end it.
One of the speakers at the event is Vince Smith a visiting AEI scholar and professor of economics at Montana State University and he has released a statement in anticipation of the legislation and you can read the statement here.
The primary argument against HPO is that the discovery price has provide the necessary crop insurance protection available at the time of planting. If the price rallies into harvest time, critics indicate there should be no additional payment since the farmer will take advantage of that price when they sell the crop. This is the argument for eliminating this crop insurance option.
If you feel strongly otherwise, then you should contact your Senator or Representative and let him/her know your feelings. The panel for tomorrow is:
- Drew White, Heritage Action
- Dr. Vincent Smith, American Enterprise Institute
- Andrew Moylan, R. Street Institute
- Mike Lavender, Environmental Working Group
As you can tell from the listing, there are no farmers or crop insurance representatives invited to this.
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