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Our View: Farmers should pay more for insurance

Published: Friday, May 3, 2013 5:30 a.m. CST

As farmers become entrenched in planting season, they are hoping a crop of another kind sprouts in Washington, D.C.

That would be the Farm Bill, the federal legislation that sets the country’s farm and food policy, usually for at least five years at a time. It expired last year, but was extended for nine months when financial concerns took precedence.

The Farm Bill is not only for farmers: The Congressional Research Service reports that when enacted, the 2008 Farm Bill had mandatory costs of $284 billion over five years. Of that, $22 billion, or 8 percent, was for crop insurance, while $189 billion, or 67 percent was for nutrition programs, including food stamps.

It’s imperative a new bill is passed, and soon. Farmers cannot plan for the future if they don’t know how the system will operate. Given the importance of farming in our country, getting a bill that lasts for years, not months, is essential.

An aspect of the bill many are keeping an eye on is crop insurance, which is purchased by farmers to protect against the loss of crops due to natural disasters or loss of revenue due to price fluctuations.

Crop insurance is important. But in the new bill, lawmakers should ensure farmers are paying more of the premium on crop insurance than taxpayers.

In 2008, the total premium cost in the U.S. for crops was $9.85 billion, according to the USDA. Of that, the farmer-paid premium share was $4.17 billion, and subsidies were $5.68 billion. In 2012, estimated total premiums were $11.15 billion; of that, the farmer-paid premium was $4.15 billion, while subsidies were $7 billion.

From 1995-2011, the government had expenses of $41.7 million for crop insurance in McHenry County but revenue of just $25.03 million during that time frame, for a cost of $16.67 million to the government, according to the Environmental Working Group. That organization maintains a farm subsidy database with information it received from the USDA under the Freedom of Information Act.

We have asked in recent months for others – such as members of public unions – to pay more of the share of benefits they receive. The same holds true for farmers. They should have some financial assurance when fickle Mother Nature causes havoc, but they should not expect the taxpayers to foot the majority of the cost.

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