>> Wednesday, February 15, 2012 – Soap Box Moment
Just a few snippets I wanted to share. You can click on the titles to go to the full articles.
Heartland Institute Vice President Eli Lehrer argues America’s crop insurance program is “a $6.5 billion annual waste of taxpayers’ money” and “one of the most egregious examples of welfare for business in the nation’s vastly overweight federal budget.
“Eliminating the crop insurance program should be an easy decision. The program is much more than a waste of money — it is also bad for the agricultural economy it is supposed to support and dreadful for the environment.”
On one side of the road sits a field of corn baking in the heat with the leaves shriveling into a semblance of yellow crepe paper. On the other side of the road is a fantastic field of milo that looks like it just got a 5-inch rain. The stand is impeccable and couldn't look greener or healthier – even with a heat index as high as 113 degrees.
So why plant a crop that struggles in the heat when another crop does perfectly well? The answer probably isn't much of a surprise: subsidized crop insurance.
Thanks to the government's generous crop insurance subsidies – crop insurance companies received $3.8 billion last year from the government while posting a profit of 26.4% – farmers are defying Mother Nature and planting crops that otherwise wouldn't pay.
On the surface, the concept of government support sounds great: They help keep the business of crop insurance profitable so we farmers can easily reduce our risk. After all, in such a high-risk business as ours, how many of us could farm without insurance?
But here's where it gets turned on its head. Subsidizing a risk management tool only results in one thing: taking on more risk. If the penalty for failure is reduced or eliminated, what's the point of making conservative or smart decisions?
Here is the bottom line. If one corporation farmed your entire state, the federal government would pay 60 percent of its crop insurance premiums on every acre in every year – the better the year, the bigger the subsidy.