Farm bill ends subsidies, cuts food stamps

[Spata]

A group of bipartisan lawmakers on Monday agreed to a deal on a farm bill that would end direct subsidies to farms in favor of crop insurance.

The deal could trim as much as $90 a month from food stamps for 850,000 recipients.

The farm bill would last five years and needs to pass both chambers and then be signed by the president.

The bill could be passed before the spring planting season. That’s significant because farmers need to know early how it might affect prices and what to expect for their corn, wheat or tobacco yields.

The bill changes the current agricultural subsidy system. It ends direct payments to farmers for planting crops and replaces it with a revamped, beefed-up crop insurance program.


http://fox43.com/2014/01/28/farm-bill-ends-subsidies-cuts-food-stamps/#bodyTag

 

[Wheel Gun]

Sounds too good to be true. Since food stamps are now the cornerstone of American life, I'm putting this bill down as Dead On Arrival.

 

[Lurker66]

So now instead of paying farmers to either grow or not grow, we're gonna buy insurance in case the crop fails or fails to produce yeilds? Sounds fishy to me.

I bought wheat seed but corn came up....pay me. Oh I forgot to irrigate it....pay me. My cows didnt breed this year....pay me.

 

[348]

You said "beefed".

 

[clock152]

this wont fly

 

[aviator41]

Funny, I just came from the minimum wage hike for fed workers by executive order thread...

There is irony here, I am sure of it.

 

[farmerbyron]

So now instead of paying farmers to either grow or not grow, we're gonna buy insurance in case the crop fails or fails to produce yeilds? Sounds fishy to me.

I bought wheat seed but corn came up....pay me. Oh I forgot to irrigate it....pay me. My cows didnt breed this year....pay me.

I'm guessing you have never made a claim under crop insurance have you?

 

[Lurker66]

I'm guessing you have never made a claim under crop insurance have you?

No, never. But if the .gov sponsers it im sure theres loopholes that get exploited. Im not a fan of subsidizing commercial farmers or backing insurance companies with tax payers money.

 

[dennishoddy]

I'm guessing you have never made a claim under crop insurance have you?

I'm saying not. Getting a claim honored isn't a walk in the park.

 

[farmerbyron]

No, never. But if the .gov sponsers it im sure theres loopholes that get exploited. Im not a fan of subsidizing commercial farmers or backing insurance companies with tax payers money.

How's about I walk you through the process.


You contact an insurance agent and discuss varying levels of protection with varying levels of subsidy prior to planting any crop. You give your production records over to the insurance agent (the FSA has all of these production records as well) and this also factors in on the cost of the insurance coverage. If you do not have production records, you must use the county average as a baseline for production. Decide if you want your fields to be insured individually or if you want to group them all together. Make a selection on level and type of coverage and plant crop within the window allowed to be insured. Too early, you don't qualify. Too late, you don't qualify.

Fast forward to harvest or loss time (sometimes simultaneous). If it is prior to harvest, you call the agent and they send an adjuster out to determine loss. To be able to destroy the crop and change to something else you will need a total loss (rarely occurs). Most of the time it will be determined to be a percentage of damage. Say you have a 30% loss and you purchased the 70% coverage level. You will not get paid on this scenario. Say you have a 50% loss and had 70% coverage. You will get the 20% to bring you up to the insured level (all of this calculated after harvest). They will also ask about what farming practices you have performed (IE did you fertilize/care for crop etc.). The money actually comes from the insurance company so you can bet they want to find a way to keep their money.

Forgot one more aspect to the formula and that is market price. They follow the markets during planting time and take the average for a set month and then during harvest time they monitor the markets again and average the 2 to get the value they will use to calculate your loss or not. They don't care what you actually sell the crop for just whatever the average price is calculated to be.

This is just the tip of the iceberg on the complexities that are inherent to crop insurance. I have been paid many times but I have NEVER been able to make off like a bandit on crop insurance. Most of the time, the loss amounts to the premium cost that I, the farmer, pays. The economic reality is that even subsidized, crop insurance is a very expensive proposition and you only have it to keep you operating until the next crop. You guys should really be happy that things like direct payments are going away. If the farm bill is switched to a crop insurance centered program, it will cull out the deadbeats that just occupy land for the direct payments with no real intention of producing a crop.

I don't understand this disdain towards commercial agriculture. Commercial ag is the reason people have the luxury of bitching about organic, non GMO products. In fact, we produce so much food that obesity is a friggin epidemic. Our farmers get more out of every acre than any generation of humans before us. With less manpower than ever before us. We also do this at a very low cost relative to inflation. So what, we are supposed to do all this for charity? No, it is a for profit business with some damn high risks and uncertain returns.

But hey, what do I know?