![]() ![]() “What the Congress did in the 2008 Farm Bill is say let's set up an insurance program. “We had instances where on an almost annual basis we had some area of the United States that had a disaster,” said Steve Pringle, a spokesman for the Texas Farm Bureau. “We do not have crop protection in the (federal) farm program except for crop insurance, and that's the one thing that keeps us in business,” he said.Ĭhanges to the Farm Bill in 2008 largely replaced disaster assistance with insurance subsidies, and with budgetary constraints, few expect direct payments to farmers to be part of the next Farm Bill. He's reducing his cotton acreage dramatically this year, to 2,000 acres from 6,000 acres, but says with the forecast for this year being “hot, hotter, and hottest,” his outlook again is grim. Thanks to the insurance, he said he “did not quite break even.” But neither did he suffer financial devastation. Nedbalek lost more than 90 percent of his cotton last year. “I think at the end of the day, this is necessary, because without this protection a lot of our farming wouldn't exist.” I'm sure if you ask somebody who is all set on cutting spending, they are probably going to say this is a waste of money. We are subsidizing farmers through subsidies in the premium we are subsidizing farmers indirectly through subsidies to the insurance companies. “Is the taxpayer in for some money? Yes, absolutely. ![]() “The insurance companies are in that for profit, so they're bearing some of the loss as well,” he said. “I just don't think they need to be bribed to do so with such high degrees of subsidies.”īut Texas A&M University economist Dmitry Vedenov said it was the insurance companies that took on most of the liability. ![]() “I believe farmers need the opportunities to have all the tools they could possibly use to manage their risks,” he told the Associated Press. Bruce Babcock, an agricultural economist at Iowa State University, estimated the taxpayer cost for subsidizing premiums at about $11 billion for 2012, an amount he said was too much. Texas farmers collected about $1.4 billion last year, the bulk paid out to drought-stricken cotton, grain, and wheat farmers in northern parts of the state and the Coastal Bend.Ĭritics of the program say it's a costly taxpayer subsidy that encourages farmers to plant crops that might not be viable. “If we didn't have crop insurance right now, we would probably not be planting.”Ĭrop insurance payouts for 2012 are at a record $16.1 billion because of the historic drought, the second year in a row for record payments. “It's either going to have to be plum dry or plum wet,” he said. But even if it doesn't arrive, he's got about $160,000 worth of seed to put in the ground, and since he's purchased crop insurance, he's not going to opt to sit out this year's planting season. ![]()
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