Crop Insurance: Let’s Put the Gargantuan Farm Bill on a Diet
To say that the trillion-dollar farm and food stamp bill is a little bloated is putting it very lightly. Heritage’s Daren Bakst explains the CBO projects the bill’s cost to be $955 billion over the next ten years. That is the low estimate, friends. This bill is a whopper. He says:
When trillion-dollar bills are being discussed in Congress, we all need to pay attention.
Yes. And Congress needs to pay attention when conservatives make recommendations about how to rein in costs. Why? Well, we’ve mentioned on more than one occasion: our country is nearly $17 trillion in debt. That’s a really big deal. For some perspective, our debt at $16 trillion in 2012 was 84 percent of GDP.
Some will ask, are we really going to rein in spending on the backs of poor little farmers?!
No. Actually farmers experienced record profits in 2012, and the biggest beneficiaries of farm subsidies are the biggest, most technologically advanced, most financially stable farms. Farms and farmers will not be obliterated from the face of the earth if the trillion-dollar farm bill undergoes real conservative reforms.
Do recall, the federal government has also given taxpayer money to farmer for growing nothing.
So what is to be done? Many things need to change, but one thing to reform is crop insurance. Bakst explains that taxpayers pay 62 percent of crop insurance subsidies, and that is on top of the administrative fees that taxpayers pay to insurance companies that participate in the crop insurance program.
Then they’ll respond the Senate “farm” bill reins in costs, right? That’s what the “farm” bill’s supporters have said!
As we’ve noted, the 2008 “farm” bill cost $604 billion while this bill would cost $955 billion. That’s not real savings. Take crop insurance for example; the CBO projects that the Senate bill would increase crop insurance costs by about $5 billion from 2014 to 2023.
At the very least, lawmakers can place a cap on premium subsidies and reduce the percentage of the subsidy that taxpayers have to pay. Even reducing the percentage of the cost of crop insurance to taxpayers from 62 percent to 52 percent would have saved taxpayers $1.2 billion in 2011 alone.
Taxpayers must be considered in this equation, Bakst explains, and common-sense reforms would result in billions of dollars of savings. Of course, the commodity program is so disruptive and costly lawmakers should scrap the entire taxpayer-funded scheme. That will take some work, but ridding government’s interference in our daily lives is what Americans deserve.