Wednesday, September 15, 2010

Politicians and Disingenuous Criticism

Farm Policy quotes former Rep. Larry Combest:
“Hail and drought are all too common in these parts, which might explain why a local wheat, sorghum, and beef producer told the House Agriculture Committee in May, ‘Risk management, specifically crop insurance, is critical to Texas producers generally and especially those in this region of the state.’

“Too bad the U.S. Department of Agriculture slashed a giant chunk out of crop insurance just a few months later, leaving area farmers more vulnerable to Mother Nature’s whims.
I don't know how he gets the last sentence. Existing producers with existing policies aren't affected as far as coverage goes. The worst you could say is, by cutting back on crop insurance administration, companies won't service their policies as well or be as prompt in handling and paying claims. And perhaps down the line that will be true. But it's not true this year or next year (inasmuch as 2011 wheat policies have already been sold).

Interestingly, Farm Policy also reports the purchase of Rain and Hail Insurance by a Swiss insurer which operates in more than 50 countries.  They value R&H at more than book value, at 1.59 times book.

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