It’s been well known for a while now that the new farm bill will have to cost less than ever, and at one time, crop insurance seemed to be on the chopping block. But, Dr. Keith Collins, National Crop Insurance Services in Overland Park, KS says, congress has been convinced that crop insurance should stay:
“Crop insurance is prospering in the 2013 farm bill. All of the farm groups have come together and have adopted the idea of ‘do no harm’ to crop insurance. Congress has listened to that. And as a result, while they are cutting a number of areas to meet the target budget, they are actually expanding the crop insurance program.
Overall the farm safety net is shrinking. Its not like crop insurance is growing and everything else is being disadvantaged. Farmers are paying for the expansion in crop insurance by giving up direct payments and taking cuts in their traditional price and income support programs. It’s a choice by farmers, to put more of their future with crop insurance than the old traditional programs.
The big selling point has been what happened in 2011 and 2012. In both years we had terrible drought and in 2013 America is planting record acres. Crop insurance has helped to make farmers resilient. They know that and members of Congress know that. In addition, Congress has long tried to improve the crop insurance program to avoid annual ad hoc disaster assistance bills. In 2011 there was no call for an ad hoc disaster assistance bill for crops and there wasn’t one in 2012 either. So Congress can look at the crop insurance program and know they don’t have to do with what they had to do with Hurricane Sandy in the northeast.
With ad hoc disaster assistance, the tax payer pays 100%, with crop insurance farmers pay about $4 billion in premiums. Its something that the tax payer doesn’t have to pay.
In 2012 the crop insurance companies actually lost money, about $1.4 billion. That money went to pay part of the claims.”
Keith Collins with National Crop Insurance Services.