The Chicago Tribune says United
States’ crop insurance is a huge ripoff.
“If the facts about the billions of
taxpayer dollars being wasted on this boondoggle were widely known, no one
would stand for it.” the newspaper says.
Insurance companies and agents
skimmed as much federal-government money from the program as farmers claimed in
benefits over the last decade - $30 billion each – the newspaper says, citing a
study by Iowa State University.
The paper says the program is “poorly understood”
and about to be expanded in the Farm Bill currently being crafted by
politicians in Washington.
“Unlike practically every other
sector of the economy, farming is awash in profits,” the Tribune says.
“The embarrassment of riches has
made it difficult to justify any of the usual farm subsidies, especially in
light of runaway budget deficits. Big agriculture and its supporters have
settled on crop insurance as the means to keep federal dollars flowing.”
The newspaper says most Americans think crop insurance is a safety net against a poor crop, but in fact it offers revenue insurance at 80 per cent.
“The coverage can be used to
guarantee that these private businesses lock in a profit. Any business would love insurance like
that, but it would be unaffordable," the Tribune says.
“It would be too expensive for
farmers too, were it not for Uncle Sam."
Federal subsidies increased from
$1.7 billion in 2002 to $7.4 billion last year.
The Tribune says “the Iowa State
analysis showed that crop insurance already is so costly that it would be
cheaper for taxpayers to give it away.
“By cutting out the middleman, the
government could furnish every row-crop farmer in America with free insurance
in the event yields fall short.
“The policies would not guarantee
revenues. They would cover crop losses, at the full market price — providing
the robust 'safety net' that farmers claim is all they ever wanted.
“Compared to the current system,
handing out yield insurance would save taxpayers $6 billion over 10 years. It
would deliver $5.6 billion more in benefits to producers over the same period,
the Iowa State report calculated,” the Tribune says.
