The federal Farm Bill is currently under discussion, and though its fate is uncertain, part of what is on the table is increasing government subsidization of insurance companies through a crop insurance program created to reduce the risk of farming. The latest report by the Food & Environment Reporting Network, published by msnbc.com, takes a closer look at this crop insurance program.
While some farmers and farm groups believe that crop insurance is necessary and ripe for expansion, critics of the program fear that costs could be higher in the long term than the $5 billion in direct payments the new Farm Bill seeks to eliminate. One of the main criticisms is that unlike direct payment programs, which pay farmers whether or not they farm their land, crop insurance doesn’t require them to follow conservation measures.
The article cites as an example the largest federal crop insurance program–federal crop–which is administered by the U.S. Department of Agriculture (USDA) in partnership with 15 private insurance companies. It is a $7.3 billion-a-year program under which taxpayers pick up about 60 percent of farmers’ premiums, and cover nearly 20 percent of insurance companies’ operating costs.
You can read the full investigation here on our Web site.