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smokeyjay
Advisor

Re: AgPoll: Should crop insurance take more cuts?

I don't know of anybody in my region, let alone within my state, that "farms" the crop insurance for the money.  I do not even know anyone that does that to collect every three years, like you suggest. 

 

It's a no brainer....it costs the producer more money to not do his best to get the best crop possible.  Crop insurance never insures 100 percent of the value of a crop.  The highest coverage is 80%, but the premium expense forces a producer to assess his risk against the potential benefits of collecting. Besides, as crop losses increase or come "back to back" on occasion, the premium rises to reflect the increase in loss. 

 

Who in their right mind would even try to ride such a "gravy train" when it doesn't even exist? 

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smokeyjay
Advisor

Re: AgPoll: Should crop insurance take more cuts?

I failed in my first post....Please reread it and you have answered your question.  USDA RMA already took a 12+billion hit in cuts the last two years.  That's more than any other government program at that time.  Ag took double digit cuts, while other non ag programs, including nutrition, entitlements, defense, interest on the national debt, received increases during those years. 

 

Now, how can you expect ag programs, which consists of less than one quarter of 1 percent of total spending, to solve the deficit problem?  It is a numerical impossibility!! 

 

Please, what part of this simple math question do we not understand?

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k-289
Senior Advisor

Re: AgPoll: Should crop insurance take more cuts?

Unlike "oil" which we have an unquenchable thirst and we can't get a handle on  ---we can feed ourselves--"feeding the world" kind of a stretch --- the African examples don't fit the comparison --- 

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smokeyjay
Advisor

Re: AgPoll: Should crop insurance take more cuts?

You may be right, about feeding the world.  However, there's a ton of evidence that suggests starvation is not a result of our inability to feed the world, but corruption in government and logistics.  If that is why you make this assertion, then, I agree.

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GoredHusker
Senior Contributor

Re: AgPoll: Should crop insurance take more cuts?

Why does everyone assume that if the subsidies are taken from crop insurance that crop insurance disappears?  My Federal Crop Insurance would have cost me around $85/acre without the subsidies.  Would I have bought crop insurance without the subsidy?  Of course I would have.  We have cash rent cowboys here offering $400+/acre in cash rents.  If they can pay this amount in cash rent, they surely can afford the additional $60/acre + or - increase for crop insurance.  I'd venture to guess that if the subsidies disappeared from crop insurance that farmers would skimp on cash rents and land cost long before they'd skimp on inputs.     

 

Saying everyone is subsidized via workman's comp. and unemployment insurance is naive at best.  Apparently, those saying these things don't have and have never had employees.  The employer pays for work comp. insurance.  The employer pays for unemployment insurance.  How are the workers subsidized?  The only one subsidizing them is in fact their employer.

 

I urge anyone to take their crop insurance premium and figure what the American taxpayer is handing out in welfare to you.  I figure the American taxpayer was on the hook for nearly $80,000.00 just on my policy alone this year.  Anyone not seeing a problem with this needs to keep their mouth shut when it comes to what the gov't spends on entitlements, etc.  Everyone wanting to keep the subsidies on crop insurance should absolutely love Obamacare. 

 

I'm sorry, but if the crop insurance subsidy is a make it or break it in terms of whether your operation can make it then a different occupation needs to be found.  We're in a period of seeing profits in the $300+/acre area.  If you can't afford that extra $60/acre for your own insurance, then you're in big trouble when prices do decline.  Think of it another way.  With the revenue protection, you basically get a free put at the planting price on whatever % level you take via the insurance cost.  A $6.00 put on Feb. 15 would have cost roughly 70 cents a bushel.  Let's assume you have a 200 bushel APH and take out the 75% level of insurance.  For the cost of insurance, you have a free put on 150 bushels per acre.  If those same bushels had to be protected using a put, it would have cost $105/acre to buy the put.  My insurance at that level without the subsidy would have cost roughly $85/acre.  The insurance without the subsidy would have saved me $20/acre.  Again, why do we need to keep the subsidy?       

 

 

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Blacksandfarmer
Senior Advisor

Re: AgPoll: Should crop insurance take more cuts?

Wow Gored you are a real piece of work! No I don't employ people but I also understand employers pay into an unemployment insurance or a "pot" if you will. In a state like mine where we have a large amount of people unemployed, do you REALLY think that pot can support all those unemployed people? NO! There is no way! Not all of us are in an area that runs 200+ bushel corn.... Some of us have multi-year droughts that can be devastating to not only the farmer but those living in that rural community. If crop insurance goes away with current input cost for corn, I would hate to be a livestock producer because you will see a lot of soybeans or wheat planted instead of corn. There needs to be a safety net in place. 

 

Oh and another thing, I don't need another occupation. Mommy and daddy didn't give me a farm, so I work 2 jobs to pay the bills and farm on the side + I fought for your worthless a$$ so please give me a little more respect than this. So I am among the future of this business, and if you felt so strongly against government subsidized crop insurance, then don't be a hypocrite and go without it!

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wt510151
Senior Contributor

Re: AgPoll: Should crop insurance take more cuts?

Animal agriculture has made a lot of substitutions in their feed rations in the last 10 years. For some, they import corn or feed wheat. Others have increased DDGS to half of their rations. Remember grain sorghum? It can withstand drought better than corn and is nearly a 1 for 1 substitute. Increasing the protein increases the growth rate as long as there is enough energy included in the ration. That can come from substitutes such as bakery waste, rejected pet foods, and fat. Rations are no longer just corn/soy based.

 

Subsidies, whether they are crop insurance, dcps or ldps, have long favored corn. They are manipulating the demand for that product at the expense of lower input cost production of small grains, grain sorghum, forage and pasture. Ever wonder why Argentina and Brazil are switching some of their available acres to corn instead of soybeans? Ever wonder why cow/calf production is decreasing at the time of record fed and feeder cattle prices? Land is too valuable here to get smaller margins from lower cash crops, thus the increased production of risky dryland corn.

 

I thank you for fighting for me, but did you fight for a country that is begging for increased government help for its poorest people without raising revenues from those who can afford it? Until something is changed in that equation, spending will be cut from those who have the smallest voices. Remember they are predicting we will have record income this year onward.

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Blacksandfarmer
Senior Advisor

Re: AgPoll: Should crop insurance take more cuts?

Thanks for the enlightenment in feed rations. The livestock guys need to find some way to survive these high prices on feed. On the government subsidy side of things I just don't want agriculture to return to a 1980's style of crisis. The government can take the DCP away and I would be fine with this but a safety net for ag should be a must. If banks and car makers can be bailed out in tough years why can't the farmer? I farm and work in a factory so I see both sides of the issue here. Quite honestly I believe our governments way of doing taxes should be reviewed. The majority of taxes in this country are paid by the middle class non business owners mainly since they don't have much of anything to write off their taxes. I have always been in favor of some sort of flat tax, that way everybody pays the bills for Uncle Sam rather than just the blue collar working folks. 

 

As for my blow up with Gored, not to say he didn't deserve it for some of the things he had to comment on me for, but it was a little over the top and I don't normally get that upset with another poster. For some of us even these high prices for crops wont make us much money this year. For some of us this will be a crop insurance year. I have only received a crop insurance payment one time and that was for the price blow out in 2008. This year may be different though, first we struggled with late planting, then the rain shut off from mid June until the first week of August and now back to excessively wet.

 

 

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Nebrfarmr
Veteran Advisor

Re: AgPoll: Should crop insurance take more cuts?

My dad had the idea, that they subsidize the first 500 acres, or so, and after that, you are on your own.  If you want to farm a lot of land, you can do it at your own risk, or buy your own insurance.  I, personally, don't farm a lot of acres, much of my income is from livestock, and other work, so all the subsidy I got was between $4000, and $5000 (I say much, it used to be 'most', but I did have a pretty profitable year in my corn last year, and this year looks to be good, as well).  Funny, because this is less than half of what Ipaid in taxes last year, all told.


However, I'm in 100% agreement with BlackSand, that if the insruance subsidy were cut completely, we would have less row crops, specifically corn grown, in a time when we need all we can get.  Maybe in 5 years, we'll have a surplus again, but as of now, we don't have the acres to lose. 

I live in a kind of 'fringe area' for row crops.  Irrigated crops are very consistent, and do very well.  However, the environmentalists have it now to the point that it is all but impossible to get a permit to add any irrigation anywhere, that the dryland acres around here, are hit-and-miss.  Dryland corn runs anywhere from 50-150 BPA, depending on the year on the better ground, and from 30-100 on average ground.  Without insurance, this would go to something else, or be turned to grass, for grazing on at least some of it. 

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GoredHusker
Senior Contributor

Re: AgPoll: Should crop insurance take more cuts?

"If banks and car makers can be bailed out in tough years why can't the farmer?"

 

Banks and car makers are not bailed out each and every year.  However, your crop insurance is subsidized each and every year.  When the majority of the subsidies started to show up on crop insurance, the idea was that disaster payments would never have to be paid again.  However, there has yet to be one year where disaster payments haven't been made since the bulk of the crop insurance subisides showed up.  When one receives subsidized crop insurance and a disaster payment, it's like bailing out the car makers and banks twice.  I think we all know how popular it was to bail out the banks and car makers once.  If the average American taxpayer knew they were bailing us out as many as two times a year, the party would be over. 

 

I just don't understand how so many people on these forums scream and yell about entitlements, but then they scream and yell when someone even mentions removing crop insurance subsidies.  The biggest problem facing our country today is everyone wanting their cake and eating it to.  I'm a lot more in favor of removing crop insurance subsidies than I am for means testing Social Security because with Social Security funds have been paid in each and every year to the SS fund.    

 

 

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