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Veteran Advisor

Sorry

Sorry to the Trump supporters...a 31% in crop
Insurance must be kind of hard to swallow,
Plus low commodity prices, and trade problems.

I have to say, I'm less than happy.
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47 Replies
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Honored Advisor

Re: Sorry

Lets not loose focus on this............ 45 haters should be elated,,,, lets maintain focus.....

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Veteran Advisor

Re: Sorry

Keep   in  mind   -    proposed   vs.  purposed  -  and,  while,  already ,  the  insurance  industry  has  the  gloves  laced  at  ringside  - - -

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Honored Advisor

Re: Sorry

We`ll have to pay 52% of our insurance premiums instead of the 38% that we now pay.  And Bigshots that now make less than $900K in AGI will be knocked down to $500K AGI to get in on the good deal.   I don`t know, the government will be picking up 48% of our insurance tab, it`s hard to look that gift horse in the mouth, they don`t havta pay nothin` ya know.   Sorry for the double negative.  But cheap crop insurance is a huge reason we have all this over production and over supply in the first place, cheap risk removal for row cropping land that should`ve remained in pasture like it was pre-$7 corn.

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Veteran Advisor

Re: Sorry

Yep, that's just the proposal.  Still, if it would come about, I'd certainly give some insurance coverage changes some thought.  Personally, think I've collected more than my premium perhaps 2-3 years out of 25.  Financially, can withstand a setback much better now than 25 years ago.  If many others look at it same way, it would be a spiral downward for crop insurance -- the lower premiums we enjoy are due to a combination of subsidies AND widespread participation in the program AND delivery of the program at a competitive cost.

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Veteran Advisor

Re: Sorry

During the previous administration, they tried numerous times to cut corners on the crop insurance program.  Maybe since Trump has proposed it, it will meet with stronger headwinds.  Personally, I could live just as well without some of the other USDA programs, along with a reduced FSA (more of it could be easily automated or placed online anyway).

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Honored Advisor

Re: Sorry

Maybe........ hopefully........ the premium gets whittled back to somewhere close to reality ....

Will the insurance industry bail if usda isn't handing out a $30-50 per acre gift direct to the insurer...

 

Maybe the crop insurance agent won't be a big buyer of farm land next year.?????

 

Farmers may realize that part of the farm bill wasn't helping them at all.

 

 

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Veteran Advisor

Lower Crop Insurance Subsidy

I'm strongly in favor of lowering the crop insurance subsidy - better yet, get  rid of it.  It is supporting an artificial and unsupportable grain production system that is harmful to agriculture in many ways.  The government does not owe the American farmer a way of life or a standard of living.

Veteran Advisor

Re: Sorry

Some insurance outfits might bail if cut back too much, others would probably pick up the slack to make it up on volume.  In the past, some insurers have carried their own risk on some of those policies anyway, just to make it possible to have greater profit potential, or loss potential of course.

 

I've heard crop insurance agents say they don't make much off the crop insurance policies, yet have also seen that they live in really nice houses, have nice shops, new pickups, very modern equipment, and continue buying land.  Don't have a problem with any of that, yet we all know they didn't get much of what they have from farming.  Otherwise, there are agents that really don't make much off of crop insurance because they are sub-agents for someone else -- they originate the policy and have their name on the policy as agent, yet there is another agency that does most/all the paperwork and collects most of the agent share of the premiums.

 

Haven't done this recently, maybe 10 years ago, yet I once set up a spreadsheet and put in all my data on acres and yields for previous history for each farm, and did a comparison of different types of policies and levels of crop insurance based on current premiums at the time for each policy type/level.  Whenever I did this, I looked at costs of each type/level policy compared to potential claims for a period of several years.  At that time, what I found, at least for my farm during that time period, was that there were 2 policies that would have actually paid more in claims than what they cost in premiums -- these were the cheapest policy CAT (due only to prevented planting and a wheat freeze-out one year), and the most expensive policy (I forget what it's called, but it's the one that pays based on county yields, and the payoff is/was a factor of 1.5 or 2 times the actual loss).  ALL of the other yield plan and revenue plan types of policies I looked at over time actually were money losers, even with the premium subsidy -- the more I would have spent, the more I would have lost (premiums versus claims, accumulated over that time period).  Of course, that's what makes insurance work, as opposed to just being a hand-out.

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Honored Advisor

Re: Sorry

And if your in a high risk scenario ---like dry land farming in a drought.... The policies will exclude you after two losses.

There is not a group of farmers carrying each other.  It is "you pay for your losses" in either higher costs of no coverage.

Even if a neighbors irrigation makes the company money and has little risk.  Your dry land drought loss is on you ---Your out he is in.

He makes us money.  You don't.  Even the same producer is not allowed to moderate his higher risk practice with his low risk practice.

It is just a high class scam that hurts the small higher risk farms more than the low risk, well endowed farms.

 

 

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