Commentary: Keep crop insurance affordable in new farm bill
Means testing would be a big mistake and could spell higher premiums for all farmers who purchase crop insurance. Why? Because by parsing out the biggest farmers, the pool of insured shrinks and thus the risk for those remaining gets bigger. For example, if a car insurance company excluded the best drivers from their pool of insured, the only drivers left would be those who are the riskiest, and thus the costliest to insure. This fact would drive up the premiums for all remaining drivers.
Risky Montana business
The fact is that farming in Montana is riskier than in other parts of the country because our rainfall is generally much less than in the Corn Belt. The fear for me as a wheat producer is that means testing would alter the mix of those who purchase crop insurance and skew it against those of us who are in the high-risk areas. Premiums in Montana, and through out the rest of wheat country, will go up.
Think about it this way: this country has faced back-to-back years of major natural disasters. The year 2011 saw record floods, freezes, droughts and even a hurricane. Then 2012 was the worst drought we’ve seen in decades. Yet despite this level of farm loss, there wasn’t a single call to Washington for a farm disaster bill for cropland. That’s because most farmers were already protected by crop insurance policies they had purchased for themselves.
When Congress begins its discussion of the next farm bill, crop insurance is sure to be a key topic of conversation. Congress should remember a simple saying that has been my north star through my life: “If it’s not broken, don’t fix it.” Congress should do no harm to crop insurance.