Some say subsidized crop insurance, which is up for renewal, shields farmers too much
A MARTÍNEZ, HOST:
Farming is risky. Success depends on the weather, and the weather is getting more extreme and less predictable. Taxpayers help protect farmers with federally subsidized crop insurance, and that program is up for renewal this year. But climate change is raising related expenses, and some argue that subsidized insurance shields farmers too much. Here's Frank Morris of member station KCUR.
FRANK MORRIS, BYLINE: Droughts, like the one that destroyed much of this year's Kansas wheat crop, are tough on farmers. A drenching rain came too late to save John Thaemert's crop, but a federal program softened the blow.
JOHN THAEMERT: Thankfully, I've got crop insurance, which will help, so thank goodness for crop insurance. Crop insurance doesn't make you money, it keeps you in business to plant again next year. It's a beautiful thing.
F MORRIS: Taxpayers pick up most of the bill for this protection. The government pays roughly 60 cents on the dollar for crop insurance premiums and shells out hefty subsidies to the crop insurance companies involved on top of that. Jennifer Ifft, an agricultural economist at Kansas State University, says the program keeps growing bigger and more important.
JENNIFER IFFT: Crop insurance is a foundation of the federal farm safety net. And that's language that is commonly used.
F MORRIS: Ifft says crop insurance guarantees farm income, which means banks get paid, farm towns stay afloat, and U.S. farmers continue growing lots of food year after year. Crop insurance is up for renewal this year as part of the farm bill being debated this month. Congress has expanded and sweetened the program in the last few farm bills. It now covers over a hundred crops. Corn, soybeans, cotton and wheat are the big ones. And last year, it insured more than 490 million acres. Taxpayers pony up about $9 billion in a typical year. And that number is rising, according to Steve Morris, a director in the U.S. Government Accountability Office.
STEVE MORRIS: Part of that is just because of the scale and size of the program. You're having more producers sign up, etc. The latest costs were, you know, upwards of 15 billion or so. So you know, it's a very large program and it's getting bigger.
F MORRIS: Last year, crop insurance companies paid out more than $19 billion to cover crop failures. That's a record. Drought caused much of the damage. Climate scientists say that warming temperatures are intensifying drought, triggering mounting losses for the crop insurance program. Anne Schechinger, a senior analyst at the Environmental Working Group, says that by shielding farmers from some of that, crop insurance encourages risk-taking because farmers are playing partly with house money.
ANNE SCHECHINGER: Because right now, high-risk land is subsidized at the same rate as regular, perfectly productive farmland. So you're encouraging farmers to plant in these high-risk areas, like flood plains, that are going to result in more loss over time.
F MORRIS: Many private sector insurance companies are pulling out of disaster-prone regions, even whole states, to cut their exposure to climate change. Meanwhile, Schechinger says subsidized crop insurance covers the biggest cash crops no matter where they're planted.
SCHECHINGER: So it is totally opposite from what most insurance industries are doing right now with climate change. The federal government is still choosing to fund the crop insurance program even though there are huge losses because of climate change. And taxpayers are still left to subsidize these losses.
F MORRIS: Schechinger says Congress should tailor crop insurance to reward greener farming practices, encourage farmers to retire marginal land, for instance, or use less fertilizer. But federally subsidized crop insurance is bedrock farm policy. And many farm state legislators want to use the current farm bill to keep crop insurance growing.
For NPR News, I'm Frank Morris in Kansas City.
(SOUNDBITE OF NITTY GRITTY DIRT BAND'S "BOTH SIDES NOW") Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.