Since the 2014 Farm Bill was enacted, crop insurance has come in more than $3 billion under budget.
With overall spending on farm policy coming in at only one quarter of one percent of the entire federal budget, U.S. taxpayers are getting a great return on investment with access to safe, abundant, inexpensive food and fiber.
“Everybody in America eats, and I think we probably have the best deal out there in terms of our food,” says Mechel “Mickey” Paggi, an economist with National Crop Insurance Services, in a recent interview with the National Association of Farm Broadcasters.
Paggi points out that as U.S. farm policies have evolved, taxpayers save more than they had in the past, due in part to changes in crop insurance’s cost-sharing structure. Farmers have “skin in the game,” he notes, because they have to pay a premium to get protection. In fact, farmers have spent almost $50 billion out of pocket since 2000, and they shoulder at least 25% of any loss before indemnities kick in.
“It’s a far cry from the old days of the ad hoc disaster bills, where taxpayers were on the hook for 100% of the payout,” he says.
Since the 2014 Farm Bill was enacted, crop insurance has come in more than $3 billion under budget, Paggi says.
“There’s no secret as to why we hear leaders in both the industry and in Congress saying we need to keep a positive attitude and a strong crop insurance program going into the next farm bill,” he says.
NCIS president Tom Zacharias adds that much is at stake as the next farm bill gets crafted.
“That [crop insurance] safety net will collapse if crop insurance policies aren’t widely available, aren’t affordable to producers, and aren’t economically viable to be administered by efficient private insurance providers,” he says.