Federal Crop Insurance Gets Failing Grade

Today we released a new policy brief, Evaluating Federal Crop Insurance Promises vs. Performance: A Report Card.

The grades show it's time to reform federally subsidized crop insurance programs. In particular, reforms that emphasize conserving soil and water, putting real limits on subsidies to the nation’s largest farms, and ensuring subsidies are transparent to taxpayers are needed.
Farmers across the Midwest and Great Plains have been telling us about the negative impacts of federally subsidized crop insurance for over a decade. A farm safety net is important to help family farmers mitigate risks. But real concerns have arisen with the current crop insurance program.

The best way to begin addressing those concerns, we thought, is through honest and forthright assessment of the crop insurance system. That has been our top priority since launching a Crop Insurance Reform Initiative in early June.

The report evaluates 6 categories of performance: reliability, transparency, support for beginning farmers, emphasis on crop diversity, efficient use of taxes, and conservation of soil and water. The policy brief explains why each catgory was awarded the letter grade it received.
We hope the familiar report card format helps to simplify a set of complicated issues. We also hope it stimulates many of you to help make the program work well for farmers and taxpayers.

Grades ranged from a B to several F marks. The policy brief offers further analysis and describes the reforms that could be enacted to improve performance of the crop insurance system. Overall, the crop insurance program received a failing grade.
Crop insurance needs some serious reforms before we can honestly say it is a real safety net that deserves to advance, as is, in the next farm bill debate. The impact crop insurance will have on future years of farming practices is significant. That makes reform of federally subsidized crop insurance vitally important to the future of rural and small-town America.
Subsidizing the nation’s largest and wealthiest farms on every acre, every year, regardless of crop prices, production, or farm profitability, is the wrong direction for an effective safety net program. Absent reform, crop insurance gives mega-farms an advantage in bidding up land costs, driving their smaller neighbors out of business, and preventing the next generation of farmers from ever getting started.

You can download a copy of the policy brief here.