EWG, NCIS disagree on supplemental coverage option
October 10, 2013 | 08:17 PM
The Environmental Working Group said in a report released today that the crop insurance supplemental coverage option in the farm bills would lead to another round of big payments to farmers in drought years, but the crop insurance industry said the report was yet another one-sided and slanted report intended to dismantle the farm safety net.
Agricultural economist Bruce Babcock said that in 2012 farmers would have gotten another $6.8 billion in total crop insurance payments on the top of the $17 billion in indemnities that were paid. Babcock said the use of harvest season prices in determining the payments should be eliminated because if the crop is small and prices go up, farmers’ payments would total more than they expected to earn when they planted the crops in the spring.
But Tom Zacharias of National Crop Insurance Services noted that Babcock and EWG had used the worst year in the past 25 to conduct the study.
“These are the same critics who said that the 2012 drought-related taxpayer costs for crop insurance could be $40 billion,” Zacharias said. “They were off the mark by $26 billion.”
“EWG also accused farmers of ‘praying for drought,’ ‘laughing all the way to the bank,’ and likened them to ‘drunks at an open bar,” he said. “Their cheap metaphors only serve to deride a farm community that deserves praise, not criticism.”
Zacharias also said that the report “assumes that every farmer buys revenue protection and that no farmer substitutes SCO for some of their RP coverage, which is highly likely to occur and would reduce the costs of the traditional crop insurance program.”
Agricultural economist Bruce Babcock said that in 2012 farmers would have gotten another $6.8 billion in total crop insurance payments on the top of the $17 billion in indemnities that were paid. Babcock said the use of harvest season prices in determining the payments should be eliminated because if the crop is small and prices go up, farmers’ payments would total more than they expected to earn when they planted the crops in the spring.
But Tom Zacharias of National Crop Insurance Services noted that Babcock and EWG had used the worst year in the past 25 to conduct the study.
“These are the same critics who said that the 2012 drought-related taxpayer costs for crop insurance could be $40 billion,” Zacharias said. “They were off the mark by $26 billion.”
“EWG also accused farmers of ‘praying for drought,’ ‘laughing all the way to the bank,’ and likened them to ‘drunks at an open bar,” he said. “Their cheap metaphors only serve to deride a farm community that deserves praise, not criticism.”
Zacharias also said that the report “assumes that every farmer buys revenue protection and that no farmer substitutes SCO for some of their RP coverage, which is highly likely to occur and would reduce the costs of the traditional crop insurance program.”
