Agri News, MN
05-15-07
Northern Iowa news and notes
Babcock testifies about federal crop insurance
AMES, Iowa -- Bruce Babcock, the director of the Center for Agricultural
and Rural Development at Iowa State University, recently testified before a
House committee concerning crop insurance.
Babcock presented information on how federal crop insurance could be reformed
to benefit farmers and taxpayers. He said too much crop insurance money is
spent on program administration and not enough is spent on supporting
financially distressed farmers.
"Every dollar in net payments provided to farmers through crop insurance costs
taxpayers that dollar plus another 78 cents to deliver,'' he said.
He said much of the inefficiency comes from the way Congress subsidizes the
program to keep costs down for farmers.
"This premium subsidy is now so large that the average farmer in the program
can expect a rate of return on producer-paid premiums of 143 percent,'' Babcock
said.