Crop Insurance and Disaster Relief Programs
What do Crop and Revenue Insurance Programs have to do with the 2012 Farm Bill?
Well, one effective way to make changes to the 2012 Farm Bill that would 1) be budget friendly, 2) promote conservation efforts and 3) support small farms with diversified crops would be to address and reform the current Crop and Revenue Insurance Programs.
What do the current Crop and Revenue Insurance Programs look like?
1) Right now, taxpayer subsidies for crop insurance are the largest single item in the farm part of the farm bill budget, with the federal government paying 60 percent of crop insurance premiums on behalf of the farmer or landlord. This is true no matter how large the farm or how wealthy the farmer. This current model of insurance subsidies tends to promote farm consolidation which continues to take money away from small farms and put it into the hands of large agricultural operations.
2) Currently, crop insurance programs favor monocultures, leaving highly diversified farms without an effective insurance option. Although agricultural monocultures have their place they also have their problems and risks, and it only seems fair to level the playing field for those who use diversified systems to reduce risk and create environmental benefits.
3) Also, unlike commodity programs, not even the most basic of conservation requirements are attached to these insurance subsidies, which means the public is paying for insurance subsidies with no assured natural resource protection in return.
How can we effectively reform the Crop and Revenue Insurance Programs?
The 3 key issues identified above, stemming from an outmoded model of Crop and Revenue Insurance, can effectively be address by implementing Coverage Limits, Whole Farm Insurance, and Conservation Compliance Requirements.
- Initiating Coverage Limits to Crop Insurance Programs would save money now and decrease taxpayer burdens in the future. This amendment would align insurance subsidies with commodity program policy and target spending in a manner that reduces subsidies that encourage farm consolidation and once again supports family farming in America.
- A Crop Insurance model that protects Whole Farm and diversified crops could include, but is not limited to, specialty crops, mixed grain/livestock or dairy operations, contract growers, and organic and conventional farms. These farmers would then be rewarded, rather than punished, for healthy risk management-through-diversification practices.
- Lastly, re-establishing Conservation Compliance Requirements for federal crop and revenue insurance benefits would encourage more environmentally conscious farming practices and disallow any commodity and insurance subsidies to cover crops on any native prairie, permanent grasslands, or other remaining native land that does not have a cropping history.
**The information provided above was largely courtesy of the National Sustainable Agriculture Coalition’s 2012 Farm Bill Platform: Budget Chapter, which can be read in its entirety at http://sustainableagriculture.net/wp-content/uploads/2011/09/Farm-Bill-Budget-Chapter-NSAC-Farm-Bill-Platform-Sept-2011.pdf.
Click HERE to read about the American Soybean Association’s new proposal for Crop and Revenue Insurance Programs that “propose getting rid of direct and counter-cyclical payment programs to create a new risk-management program that would fill the gap between what crop insurance covers and expected farm revenue…The ASA wants commodity-specific revenue benchmarks for individual farmers based on historical yields and prices, and compensate them for part of the difference when current-year revenue for a commodity on their farm falls below a percentage of the benchmark. All planted and prevented planted acres would be covered under the plan.” Additionally, the National Council of Farmer Cooperatives (NCFC) is calling for the opposition of “efforts to link crop insurance with conservation compliance“.
More to Read
New Report on Overlap in Farm Safety Net Programs (National Sustainable Agriculture Coalition, December 6, 2011). A new report from USDA’s Economic Research Service analyzes potential overlap and duplication in federal farm safety net programs. The report, Identifying Overlap in the Farm Safety Net, clarifies competing definitions of what is meant by the terms “farm safety net,” provides an overview of where overlap can occur in these programs, and presents an analytical method for measuring this overlap.
Farm Safety Net Proposals for the 2012 Farm Bill (Dennis A. Shields and Randy Schnepf, Congressional Research Service, Ocober 6, 2011)
Iowa Study Finds Gap in Knowledge of Sustainable Agriculture Among Lenders and Crop Insurers (Andrew Burger, SeedStock, October 3, 2011). Is it more difficult for farms that practice sustainable agriculture to obtain loans and crop insurance due to institutional bias and lack of domain expertise? That’s what researchers at the Center for Rural Affairs, with support from the Iowa Farmers Union and the Leopold Center for Sustainable Agriculture at Iowa State, apparently discovered. This article summarizes the findings. For the full report, see “Credit, Crop Insurance and Sustainable Agriculture in Iowa”.
A Risky Proposition: Crop insurance in the face of climate change: “Projections into the next decade indicate that outlays will outstrip entirely the cost of current commodity program subsidies, due to rising acreage enrollment and increases in extreme weather. In other words, even if the status quo is maintained and recently proposed insurance expansions not adopted, taxpayers would likely spend more on crop insurance over the next decade than on all other forms of commodity subsidies.”