Agricultural News
Crop Insurance Next in the Crosshairs, According to Art Barnaby
Fri, 13 Sep 2013 17:44:54 CDT
With direct farm payments set to disappear from farm policy, the next item in the crosshairs of those in Congress appears to be crop insurance programs, says Dr. Art Barnaby, professor of agricultural economics at Kansas State University. He was part of a panel discussing Issues in risk management at the recent Ag Issues Summit in Oklahoma City.
"That appears to be the case for people who want no farm program, no safety net at all. I think this is the last pot of money to go after. The pot of money is relatively small. Over the last 12 years the average taxpayer cost has been a little over $4 billion and throw in another billion or so for the delivery system, so we're talking a little over $5 billion a year. In Washington terms, those aren't big numbers."
Barnaby says that those who are attacking the crop insurance program are using incorrect numbers to make the cost of the program seem far larger than it actually is.
"Early on in the 2012 year when the drought was on the way in the Corn Belt there were a number of sources floating around saying it was going to cost the taxpayers $40 billion. That was an impossible number from the get go and people should have known better. But it got reported in the press and, after awhile, nobody ever challenges the number. Then, later, when it became clear it wasn't going to be that much, then the story in the press was that it was going to cost taxpayers over $17 billion. Well, when you net out all the numbers, it's closer to $12 billion and then you put into perspective that's one time in 20 years. That's not every year. In fact, you have years in the other direction where premiums exceed claims and the government costs are very small in those years."
Barnaby says there have been calls for limits on premium subsidies for large operations and implementing such a program would be problematic.
You can listen to Ron Hays's full conversation with Art Barnaby by clicking on the LISTEN BAR below.
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