By Mike Barnett
Butt out of the crop insurance debate, Environmental Working Group (EWG). Your most recent study of recipients of crop insurance is the same song, second verse of misleading and flawed analysis.
You did the same thing in the past with your controversial database of direct and counter-cyclical payments. Your interpretation of the numbers didn’t pass the smell test then. You worked the numbers portraying cooperative payments as payments to individuals. Are you doing the same thing now?
Your strategy is clear. With direct payments gone and deficiency payments rendered ineffective, kick the last leg of the safety net out from under American agriculture. Leave farmers flat on their backs without any hope of help.
Farming is a high risk occupation in Texas. Our farmers have more to lose than farmers in any other state in the nation. Our weather is unpredictable. Floods, drought, hail, wind—it can happen to one crop in the same season. Crop insurance is critical. Texas suffered more than $7 billion in agricultural losses last year due to the historic drought. Without crop insurance, there would have been no hope of recovery. It is the only thing that allowed many farmers to put seed in the ground this year.
Many countries choose import protections to provide protection for their farmers. For example, the average tariff on U.S. products entering foreign markets is 65 percent. The average tariff on foreign products entering the U.S. market is 13 percent. The U.S. chooses to assist American consumers by providing the lowest cost possible for food.
Some mechanism must be used to level the playing field so our farmers can remain competitive in world markets. Subsidized crop insurance payments are not only reasonable, but fair.
What you’re not telling us, EWG, is that subsidized crop insurance is not a subsidy check to farmers. It is an insurance premium discount. Premiums go into a risk pool to pay for future losses. Producers collect only when there is a significant loss. And in instances of revenue protection, they will be compensated only during significant price declines.
Should we question how crop insurance is managed and require accountability from both farmers and providers? Sure. We should also question where our food and fiber will come from if farmers are left without protection from natural disasters.
As one South Texas farmer told me: “In my case of irrigated crops, the word insurance is really not correct anymore. We grow a crop to harvest, then have a disaster. At most, you may recoup one-half of your cost. That’s not even a safety net really.”
But it is better than the alternative. With a new farm bill being written, the crop insurance safety net will be all that remains to protect U.S. production.
Without it, cotton, wheat and feed grains will be grown somewhere else in the world. U.S. consumers will pay more for their food and clothing. And the food security our nation has enjoyed throughout its history will be gone.
Be careful what you ask for, EWG. Your wishes may come true.