Tuesday, April 28, 2009

Babcock on FCIC

From Farmgate:

The question of governmental support for farmers’ risk management will receive either strong support or opposition, and a lesser number of folks who ride the fence. One of those with strong opinions is Iowa State University ag economist Bruce Babcock, whose thoughts are published in the Spring edition of the Iowa Ag Review. Babcock describes the programs as complex in their administration, and adds that crop insurance agents are paid commissions fully funded by taxpayers, most of the RMA (crop insurance) program risk is borne by taxpayers, and all of the FSA program risk is paid for by taxpayers....

Babcock says Congress continues to support the status quo, which is not surprising if it maintains the industry of agriculture. But he says it is not easy to understand the support of the crop insurance industry, since it duplicates FSA programs. He suggests more public awareness will result in change or the need to save money to finance the rest of the federal budget.
Almost 30 years ago we supposedly made the decision to end the duplication. :-) I'm hardly an objective observer, but I think the course of history since then is a tribute to the lobbying power of the crop insurance industry.

(For a more objective view, from CRS via Farm Policy.)

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