Crop insurance limits still farm bill issue
With both the Senate and House versions of the 2012 farm bill nearing the end-game, it’s clear that direct payments to farmers will be phased out.
But coming in: More funding for crop insurance — though maybe not for everyone.
Under the Senate’s version of the bill, which passed last month, farmers who make more than $750,000 a year would receive less government money in the form of crop insurance subsidies. The House version, a draft of which was released the first week of July, does not include limits.
“In my mind it’s discrimination on certain farmers versus another,” said Kevin Ross, president of the Iowa Corn Growers Association, about the subsidy limit. “Assets don’t necessarily mean profits and we tie a lot of money in risk every year.”
Marc Benson, who farms around 500 acres in southeastern Iowa and is a seed dealer for ag-giant Pioneer, said limitations on crop insurance wouldn’t affect his business. But some of the farmers he sells seeds to could take a hit.
“I can see two sides to that, we have some big customers, that would affect them,” Benson said. “But when the government’s subsidizing it, they get to have some say in it.”
Those wealthier farmers would have to pay more of their own money to insure their crops.
That doesn’t bother Aaron Lehman, a fifth generation farmer who has around 600 acres of corn and soybeans in central Iowa. His farm is considered small in U.S. agriculture.
“If you want to farm three counties worth of farm ground, fine, go at it, but the rest of us aren’t going to help pay the bill,” Lehman said.
For years, Lehman received what’s known as direct payments. That’s money from the federal government whether he produced a crop or not. This year he got around $8,000. With the new farm bill, those direct payments are going away, which will save the government about $5 billion a year. Lehman said he’s fine with that.
“Restrictions need to be tighter, the farm program is taking some big cuts, there’s less money for this farm bill than the last farm bill by far,” Lehman said.
But it’s a balancing act. How much can the government scrap without hurting farmers? Lehman said there’s still room for cuts, and he looks to those gigantic farms that just seem to get bigger ever year.
“I feel some of that’s fueled by direct payments going to large operations, subsidies going to large operations,” Lehman said. “Those guys have probably been expanding more than anyone in the farm world.”
Bruce Babcock, an agriculture economist at Iowa State said that’s an issue for the taxpayer too.
“Are the taxpayer dollars being well spent subsidizing really well managed farms, very smart farmers and very wealthy farmers?” Babcock asked.
The current five-year farm bill is set to expire Sept. 30. With the House scrambling to balance summer recess, campaign season and fiscal legislation, many observers don't expect a new farm bill law to be in place before current legislation expires.