Economics, U.S. Economy

Do farmers need more crop insurance?

Image Credit: Shutterstock

Image Credit: Shutterstock

Today’s New York Times reports on the proposed increases to crop insurance programs tucked into the farm bills being considered on Capitol Hill—that have the potential to cost taxpayers billions:

“The new farm bills would increase the crop insurance programs by $9 billion and include an additional subsidy called the “shallow loss” program, which would cover farmers for modest crop yields or declines in prices.

Several conservative groups, including the Heritage Foundation and the American Enterprise Institute, as well as environmental organizations including the Environmental Working Group, oppose crop insurance subsidies, which they say amount to income protection, rather than protection against crop losses from drought or natural disasters. The Obama administration has called for cuts to all of the farm subsidies including the crop insurance program.”

While AEI doesn’t take institutional positions on this—or any other—issue, I have frequently written that largely wealthy farmers do not need additional  farm bill welfare. A study I conducted with Barry Goodwin and Bruce Babcock found that the shallow loss programs being considered could cost taxpayers over $20 billion.

As I have written before, “At a time when severe budget pressure is forcing legislators to consider cuts to food stamps, it does not seem appropriate to double down on wasteful farm subsidies that largely flow to wealthy households. Shallow-loss programs are not reforms; they are a big step backward.”

One thought on “Do farmers need more crop insurance?

  1. Since 1995 the government has given away almost $250 billion in farm subsides to only 38% of farmers – the 62% majority were paid nothing. Peeling back the numbers a bit further, we find that 72% of that money went to 10% of the recipients. The average payout to the lower 80% was only $572.00 per farm.

    It is time to quit tugging at taxpayer heartstrings about supporting the hard-working farmer and recognize that farm subsidies are the vilest form of corporate welfare.

    In a capitalist society, providing government support to agricultural ventures earning their highest profits in history is absurd, especially when the likes of ADM get government payments and favorable trade tariffs – and we the taxpayers suffer through such things as higher sugar costs and the stupid ethanol subsidies included in the cost of gasoline.

    Today I heard on the radio that the poor farmers are being abused because the runaway food stamp program is not theirs and they should not be blamed. Be that as it may, are you acquainted with any “poor” farmers?

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