Friday, August 03, 2012

Don't Cry for Farmers. Your Kids Will Pay for Them.

This "crop insurance" racket is a lot worse than you might have thought.

...The USDA crop insurance program insures 264 million acres, 1.14 million policies, and $110 billion worth of liability on about 500,000 farms nationally.
The brunt of that program and its payments is paid for by taxpayers.

The Risk Management Agency, which manages the USDA crop insurance, subsidizes crop insurance premiums — through taxpayers — in two ways. First, the insurance company receives a taxpayer subsidy for administrative and overhead costs. Second, the RMA subsidizes part of the producer’s premium.

Taxpayers subsidize farmers and the 16 insurance agencies working with USDA for billions of dollars.
In 2011, taxpayer subsidies for farmers’ premiums equaled $7.42 billion, $3 billion more than farmers paid in premiums themselves, according to the Environmental Working Group, which tracks farm subsidies.

Got that?  Taxpayers pay MORE THAN HALF of the insurance premiums.  But we're not done yet.

The top 10 percent of policyholders received more than 50 percent of premium subsidies last year. The bottom 80 percent of policyholders received 27 percent of premium subsidies.

So.  The largest farms (not the '40 acres and a cow' bunch) sucked most of the TAXPAYER money--and it's money which pays the PREMIUMS, not even the claims--so far.

That's before they Corn-A-Hole us.

As to the "insurance companies"--oh, yes, they're on your teat, too!!

Insurers have been insulated from the down years by keeping a higher proportion of underwriting gains — where premium collections exceeded insurance payments — and writing off a larger portion of underwriting losses.

Taxpayers, through the Agricultural Risk Protection Act, paid $22 billion to deliver $11 billion in net payments to farmers between 2000 and 2008, according to Iowa State University economists...

So.  You pay most of the premiums, then you lose another $11 BN or so to the "insurers."

Then you get Corn-A-Holed, too.

Can you spell "racketeering"?


J. Strupp said...

Yup. It's a complete and utter scam that both political parties continue to allow unchecked.

If prices are high and yields are great, you make a lot of money. If drought strikes the nation and yields collapse, collect your crop insurance, have taxpayers eat the loss and you make money.

Nice deal. Kind of like a TBTF bank.

Anonymous said...

Kind of like a TBTF bank.

And public employees.

Anonymous said...

What a bargain for cheap food! And did you know that you get to pay nearly 100 billion dollars to subsidize the food stamp program? Just wait until the food is gone, will you be crying because a gallon of milk is 10.00? It takes crops to feed that cow that produces your milk. No crops, no milk. If a farmer can't afford to feed the livestock, they will sell. It all goes back to supply and demand. The supply would be gone but the demand will still be there. Are you ready to go hungry? This is not the first year for this county to be in a drought situation, this just happens to be the most widespread drought we've had in years. A large number of cattle farmers had to liquidate their herds last year, even more are doing it this year. The is no hay out there. They are selling their breeding stock, which means that it will take years for herd numbers to increase. Supply and demand. It's all related. It's time for the public to quit being so narrow-minded.

Dad29 said...

Paragraphs are good, Anony.

Saint Revolution said...

Oh, please, with the 1960s/1970s hippie apocalyptic-esque "where will the food come from" and "the poplulation explosion is unsustainable" fear-mongering bull.

Hey, AnnChickenLittle: the sky t'ain't falling.

No where did I put that $10.00 bottle of milk...I know it's around here somewheres...

I'm sooooooo thirsty and hungry...oh, woe is I...