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Crop Insurance – Too Good?

“What da ya mean crop insurance should be improved? It’s so good now, it is almost embarrassing,” the caller on the phone hollered.

I was expecting to hear from readers about my editorial, “Time to improve crop insurance” (Feb. 2012), but not this.

“When I go to the bank,” the caller continued, “I almost can’t look the teller in eye – I’m getting a bigger premium subsidy for from the crop insurance than she’s getting paid."

Crop insurance for his 3,000 acre North Dakota farm cost $123,000 last year and the government paid $82,000 of the premium. He paid $41,000 and collected $257,000 in losses last year.

So why’s he complaining?

He said he is a fiscal conservative and a federal budget deficit hawk. He’s worried that the amount of money the federal government is spending is going to bankrupt the country.

“It ridiculous,” he said, for the federal government to have spent $7 billion last year to subsidize crop insurance premiums when farm income had set a record.

And he didn’t agree with the National Farmers Union and American Farm Bureau presidents and the former National Association of Wheat Growers president (whom I had quoted) that the U.S. needs a strong crop insurance program to maintain its ability to feed itself.

“You think that if some farmers go broke because they took too much risk the land isn’t going to be planted?” he asked. “In 1980s, a lot of people went out of business, but every bit of land was still planted, just by different people.”

Crop insurance lobbyists are using that argument to scare consumers and Congress, he said.

Crop insurance is necessary, and it may be cheaper in the long run than making direct payments to farmers when there is a disaster, “but we should pay more of the premium when we can,” he said.

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