Farmers, Industry Groups Dispute Crop Insurance Criticism

By: Phil White Email
By: Phil White Email

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Wednesday, March 6, 2013

Part of the agricultural industry is responding is responding to what it says is unfair criticism of the federal crop insurance program.

Critics of the current system say crop insurance has become too heavily subsidized. However, farmers say it is what allows them to stay in business.

"Most producers would tell you that they'd much rather harvest a crop, take it to town and sell it," said Sedgwick County Farmer Kent Winter, responding to criticism that farmers find it more profitable to suffer a crop failure. "If I was trying to just simply farm the cash out of the insurance business to just stay in business, it wouldn't have happened. I would have been out of business years ago."

Winter counts crop insurance as just one of the risk management tools he uses on his operation. He says insurance allows producers to cover their costs if they lose crops to natural disasters such as droughts or hail storms.

"We're talking about local vendors that supply the fertilizer, the fuel, the machinery, the parts, everything that toes into putting out a crop," Winter said.

Critics of crop insurance say the program has become too bloated with federal subsidies. Companion bills were introduced this week in the U.S. House and Senate to significantly reduce subsidies for crop insurance premiums.

Sen. Jeff Flake, R-Ariz., author of the Senate legislation, said his legislation will save taxpayers $40.1 billion over the next 10 years. That is money he argues ends up in the pockets of multi-national insurance corporations. Flake said the reform will still protect family farmers.

National Crop Insurance Services said taxpayers are not on the hook for all crop insurance costs, citing Congressional Budget Office information saying farmers paid $4.1 billion in insurance premiums last year.

Winter said he is not lining his pockets with insurance payments.

"There's probably been one year and maybe two years where the loss payments I received actually outweighed the premiums that I put in," he said.

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