Farmers want to continue to cover themselves against falling prices and losses with the help of the government.
Corn and soybean farmers, especially, have been enjoying this type of arrangement for their crops for many years, and the latest insurance news is showing that this might improve.
Congress currently has a farm bill before it, which includes a provision that will likely come with an annual cost of approximately $3 billion, that would help farmers to cover the losses they incur ahead of the coverage of their own policy coverage.
Those losses include termed deductibles, which could cost a mid-sized farm tens of thousands of dollars.
Those supporting the bill are saying that it will save a significant amount of money in the long run, as it would be a replacement of a current subsidy program which currently costs an annual $5 billion. This provides direct payments to owners of farmland regardless of whether or not they have even planted any crops.
There has been a growing amount of pressure over the last few years to end the old subsidy.
Those direct payments have been seen as highly symbolic of the excessive gifts that some feel that farmers are receiving from the federal government.
Similarly, those who are opposed to this bill still say that in the long run, it could be less expensive than the current subsidy program. At the same time, though, they have explained that it will remove the funds from the U.S. Agriculture Department from a much more important food stamp program which was responsible for feeding an average of 1 in 7 Americans last year.
According to the Environmental Working Group senior vice president for agriculture and natural resources, Craig Cox. “It’s obvious why a farmer would like this, but it’s not at all obvious why the taxpayer should pay for this.” This group is a nonprofit research organization.
The proposal for the deductible subsidy worth $3 billion per year would be an addition to the current federal program that provides subsidies for the premiums themselves. That was created in the farm bill which was reported in insurance news last month when it was passed by the Senate Agriculture committee by a 16-5 bipartisan vote.