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John_Walter
Advisor

AgPoll: Should crop insurance take more cuts?

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27 Replies
GoredHusker
Senior Contributor

Re: AgPoll: Should crop insurance take more cuts?

Anyone who is against Obamacare, against the huge gov't deficit, and against the size of gov't has no other way to vote than yes the crop insurance industry should take more cuts.  However, I'd venture to guess most who have thus far voted in this poll said no even though they want every other sector to take a cut.  This is the biggest problem we face right now here in the U.S.  Everyone wants cuts, but they want someone else cut.  When it comes to them getting a cut, they scream bloody murder. 

 

Why should the American taxpayer be on the hook for more of our premium than we the producer actually is?  Wouldn't everyone like all of their insurance premium subsidized to the tune of nearly 60%?   

k-289
Senior Advisor

Re: AgPoll: Should crop insurance take more cuts?

Well   said  Gored-----untill everone pulls together---no results

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Blacksandfarmer
Senior Advisor

Re: AgPoll: Should crop insurance take more cuts?

Gored the average Joe gets subsidized in the form of unemployment benefits or workman's comp if something happens to their job or to themselves that prevents them from making a living. Farmers don't get workman's comp or unemployment benefits if the crop fails... Just a years worth of trying to survive. I think most of us can agree that the DCP should go away but crop insurance should stay the same. Let me ask you, If you have no crop insurance might you be more inclined to skimp on inputs? If not you than some of us would. Right now this country can't afford the farmer skimping on inputs on the fears of losing too much in a bad year.

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Canuck_2
Senior Contributor

Re: AgPoll: Should crop insurance take more cuts?

Blacksand, I looked into employment ins in US and Canada a while ago and I do not think it is correct to say the unemployed are 'subsidized'.

Canada is a simple wage deduction from everyones pay cheque which fully funds our plan, so far anyway. The deduction from the employee is 1.78% of wage and I think the employer matches that.

Your governments do it a little different since it seems to be a state run program backed by your federal government. It gets confusing to sort out unless you are an accountant maybe but your system has an employer tax of 3 or 6%, not sure of rate, BUT there is then a tax credit if the employer pays on time which leaves a net of less than 1% of wage.

This money goes into a trust fund/account which I think is run by each state and then the federal government backs this up with funds if the fund/account goes negative and i think several states are negative now.

The plan is to eventually pay back these deficits with future employment ins. tax.

 

The big difference is maybe the net payment with all the taxing and crediting in your country has left a deficit, probably because the fund was not big enough going into poor economics, which is going to require increased taxes in the future to make up the difference. But remember it is a tax based on the wages paid, not on a general tax on all tax payers.

Point is like Canada your fund in intended to be self funded by tax or deductions based on the workers wage. There is not an intention to subsidize with government money.

That of course is not true of crop insurance in Canada or the US.

I think your crop insurance is subsidized even more than ours since our government subsidy applies only to administration of the insurance plan. Any $ paid to a farmer because of a poor crop comes from a fund made up of premiums paid by the farmers with insurance. When we had a bad year 10 or so years ago which created a lot of pay outs our premiums were increased in the following years to increase the fund again, to be able to make future payouts. As I  said only the administration costs are covered by government, every $ I pay in premium will eventually be paid back to some farmer with a claim but no government $ go directly to the farmers in this country for crop insurance.

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Jim Meade / Iowa City
Senior Advisor

Re: AgPoll: Should crop insurance take more cuts?

I voted no because crop insurance is the feature I'd like least to do without.  Almost all the other subsidies can go.  If crop insurance goes, I'll fly without it.

What I'm saying is I'm not against ag cuts, but the question implied an inquirey in where the cuts should be.

We certainly need to reduce government spending, that is a given to me.

One thing about these subsidies - if the government pulls them or if a farmer decides to not go with them, we will have to move from a cooperative land management system to one of coercion.  It will be the EPA, not the NRCS, telling you to plant a buffer strip.  But, I'm about ready to no sign up for the farm program this year - it's about more hassle than it's worth. 

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smokeyjay
Advisor

Re: AgPoll: Should crop insurance take more cuts?

Absolutely not!!!!!!  Remember, this program absorbed two year's worth of cuts already, 12 billion worth.  No other line item in the federal budget was cut as much as ag.  But the argument for ag to take the cuts was we are going to cut other programs as well, but when the dust cleared, ag was cut and the money was funneled into other programs and their budgets actually increased! 

 

There's the old saying, fool me once, shame on you...fool me twice, shame on me.  Ag has been fooled twice into making cuts.  Shame on us for allowing that to happen, when other programs received real dollar increases.

 

I'm not saying we should support more deficit spending, but I am saying we cannot trust every argument coming from the halls of congress.  If you need more evidence, ask someone where all the bail-out money went and to whom it went.  You will never receive a completely satisfactory answer.  Yet the taxpayer, you and me, are paying the bill.

 

As for other ag programs receiving cuts, our commodity association, a grassroots based organization, they say, "any budget cuts should be fair and equitable."  No slash and burn, hit and miss on line items, but the proposals must be fair and deliberate, with checks and balances to ensure the law is actually carried out. 

 

 

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Canuck_2
Senior Contributor

Re: AgPoll: Should crop insurance take more cuts?


@smokeyjay wrote:

Absolutely not!!!!!!  Remember, this program absorbed two year's worth of cuts already, 12 billion worth.  No other line item in the federal budget was cut as much as ag.  But the argument for ag to take the cuts was we are going to cut other programs as well, but when the dust cleared, ag was cut and the money was funneled into other programs and their budgets actually increased! 

 

There's the old saying, fool me once, shame on you...fool me twice, shame on me.  Ag has been fooled twice into making cuts.  Shame on us for allowing that to happen, when other programs received real dollar increases.

 

I'm not saying we should support more deficit spending, but I am saying we cannot trust every argument coming from the halls of congress.  If you need more evidence, ask someone where all the bail-out money went and to whom it went.  You will never receive a completely satisfactory answer.  Yet the taxpayer, you and me, are paying the bill.

 

As for other ag programs receiving cuts, our commodity association, a grassroots based organization, they say, "any budget cuts should be fair and equitable."  No slash and burn, hit and miss on line items, but the proposals must be fair and deliberate, with checks and balances to ensure the law is actually carried out. 

 

 


But the question with crop insurance is why is it not self supporting like other insurance plans?

Why the subsidy?

Do you get subsidies on your fire insurance?

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Nebrfarmr
Veteran Advisor

Re: AgPoll: Should crop insurance take more cuts?

Well, in the US, there are things like health insurance, flood insurance, etc. are subsidized, as well.  It is not like crop insurance is the only one.

If I had to choose, I'd rather have my health insurance provided, than my crop insurance, but I don't know that either one is the cure-all it is made out to be.

 

The powers that be need to decide if the risk of farmers not plantig fringe ground due to risk is greater than the cost of subsidizing the insurance to insure it.  I know of guys who collect insurance every 3rd year or so on dryland corn.  If they had to pay full rates, it would grow on an average year maybe 35 BPA oats instead of 75BPA corn.  The oats maybe range from 30-50 BPA, but the corn swings from 125 down to 45 or so, depending on if the rains hit.

 

Also, if they take the crop insurance subsidy out, they had better also take out the requirement to carry insurance on everything, in order to qualify for any kind of disaster.  I irrigate my fields, and pay through the nose, plus spend 4 hours a day doing it, and because of this, I have had exactly ONE crop failure (actually only one failure since 1969, when my Dad first started irrigating), due to terrible hail (99% damage in one field).  However, in order to have my hayground covered, or to qualify for disaster aid in my pasture, I have to buy full insurance for my cornfield.

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smokeyjay
Advisor

Re: AgPoll: Should crop insurance take more cuts?

No weather event is completely predictable.  Neither is it affordable from an actuarial perspective.  The cost far exceeds the affordability of premiums paid by land owners.  Hence the need, thanks to the foresight and dedication of those legislators and farmers of the past who lobbied hard for a program that takes the extreme lows out of the equation when disaster strikes. 

 

But that's why we also have FEMA.  If you think homeowners living along the eastern seaboard are fully paying for the cost of reconstruction, think again.  If you think Texas and Arizona home owners are footing the entire bill for the wild fires and the destruction, I have some really attractive oceanside property, located in KS to offer to you at a very good price.

 

Don't think you are going it alone, because you aren't.  Subsidies in one form or another effects every resident living within our borders, like it or not. 

 

Rather than pointing fingers at someone else (due to ignorance) and saying they should not be allowed to benefit from a program, we should take a look at all forms of government spending and prioritize them according to its importance to the nation's security.  Believe it or not, food security is important.  If you don't believe this, head on over to Africa, to Somalia and see first hand what real food insecurity looks like.  I guarantee it that you will not want to live there, not even for a couple months, let alone on a permanent basis.