Federal crop insurance gets failing grade

Center for Rural Affairs report card evaluates federally subsidized crop insurance

The Center for Rural Affairs released a report card and white paper evaluating the performance of federally subsidized crop insurance programs on July 16.

“The time has come for crop insurance reforms that emphasize conserving soil and water, put real limits on subsidies to the nation’s largest farms, and ensures these subsidies are transparent to taxpayers.” Traci Bruckner, Center for Rural Affairs.

On June 3, 2015, the Center for Rural Affairs launched their Crop Insurance Reform Initiative (www.cfra.org/crop-insurance-reform) to address long-standing concerns about federal farm programs and crop insurance subsidies. According to Traci Bruckner, Senior Policy Analyst at the Center for Rural Affairs, evaluating the current state of and functionality of federally subsidized crop insurance programs has been a first-order priority since the very beginning.

“We’ve heard from farmers across the Midwest and Great Plains about the negative impacts of federally subsidized crop insurance for over a decade,” said Bruckner. “A farm safety net is important to help family farmers mitigate risks, but there are real concerns with the current crop insurance program. The best way to begin addressing those concerns is through honest and forthright assessment of the crop insurance system.”

“This report card is our earnest effort to get that assessment started,” added Bruckner. “And this is just the beginning, we will have more analysis, and more recommendations for reform coming out in the coming weeks and months.”

The report card evaluates six categories of performance: reliability, transparency, support it gives to beginning farmers, emphasis on crop diversity, efficient use of taxes, and conservation of soil and water. Along with the report card, the Center for Rural Affairs is also releasing a policy brief, which more fully explains each letter grade provided in the report card.

To view or download the Crop Insurance Report Card and Policy Brief go to: www.cfra.org/crop-insurance-report-card
“By displaying this assessment of crop insurance in a format that everyone is familiar with, we hope to simplify a set of complicated issues and attract the general public to join us in pushing for reforms,” Bruckner explained.

Bruckner also pointed out that while most of the grades we awarded are not what parents would hope to see on their own child’s school report, grades did range from a B to several grades of F. And the accompanying Policy Brief offers further analysis and what reforms could be enacted to improve the performance of the crop insurance system. In overall performance, crop insurance received a failing grade.

“A student who fails overall is usually not allowed to progress to the next grade,” offered Bruckner. “We want to stress that the crop insurance system needs some serious reforms before we can honestly say this is a real safety net that deserves to advance, as is, in the next farm bill debate. The impact crop insurance will have on future years of farming practices is significant, making reform of the federally subsidized crop insurance system vitally important to the future of rural and small town America.”

“Subsidizing the nation’s largest and wealthiest farms on every acre, every year, regardless of crop prices, production or farm profitability, puts America’s natural resources at risk,” concluded Bruckner. “And, absent reform, crop insurance gives mega-farms an advantage in bidding up land costs, driving their smaller neighbors out of business, and preventing the next generation of farmers from ever getting started.”

Established in 1973, the Center for Rural Affairs is a private, non-profit organization working to strengthen small businesses, family farms and ranches, and rural communities through action oriented programs addressing social, economic, and environmental issues.

Author: Duane Childers

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