Every time I turn on the Weather Channel it seems like another area of the country has been hit by a natural disaster. Last week, Hurricane Irene struck the east coast resulting in extensive damage to the area’s crop and livestock. Farmers in the Midwestern states of Iowa, Nebraska, Kansas and Missouri are just beginning to discover the extent of damage to their fields caused by long term flooding of the Missouri River Basin. Agricultural producers in Texas, Kansas, Oklahoma and several other states are battling a summer-long drought. Many producers with crops in the path of these natural disasters would be out of business if they did not have the federal multi-peril crop insurance program to fall back on.
However, many producers fear that the safety net is on the chopping block as the federal government hammers out the 2012 Farm Bill. The federal government is looking to cut spending in a wide variety of social and economic sectors and the farm bill will be no exception. Different producers have different opinions as to where cuts can be made in the Farm Bill and many understand that maintaining direct payments will be hard to justify. Although, non-ag lobbyist will argue that the crop insurance program is unnecessary considering the high commodity prices, producers are unified in their assertion that the crop insurance program is absolutely necessary.
Currently, the federal government pays 59% of the crop insurance premium; down from 65% to 70% it used to pay. Producers across the board argue that farmers will not be able to afford crop insurance if the premium assistance is dropped to a lower rate or is cut completely; leaving those in the path of future natural disasters no net to fall into.