Tuesday, March 06, 2007

A little action on the side...

Gaming the crop insurance system has been going on since it was invented, of course, but the practice has spread to even my area - not a big area normally for FCI - as producers bet on a seasonal price drop via GRP policies.

It going to be more expensive to place such bets, and it looks like the house is adjusting the slam-dunk odds that favored this practice in 2005 especially. Run your numbers on this excellent analysis tool.

Looks to me like we're turning the safety net into a fishing net.

3 comments:

rhoads said...

It should be more expensive; in fact taxpayer subsidized crop insurance should be done away with. Why should the taxpayer be footing part of the bill for crop insurance at the same time they're being hosed on the Farm Program? You want to bring some new farmers into the farming profession, stop this nonsense of having the taxpayer help take all the risk out of it. If you work this thing properly this year and I suppose in past years also, there is no way to lose. That's totally wrong.

Anonymous said...

So we taxpayers guarantee the largest famers with the largest payments. It only follows that we should give the largest farmers the largest guaranteed incomes with FCI. It only makes sense that we should pay billions to all beginning farmers in order that these farmers can compete with the recipients of the multimillion FCI policies that guarantee profitability and inflate all input costs.

John Phipps said...

Regardless of the fairness of subsidizing crop insurance, I am struck by the futility. Guaranteed profits are an oxymoron - the market quickly seeks them out and is doing so now via land (and to a lesser extent, input) costs.

I am always struck however by the astonishing hubris of program crop farmers who genuinely believe other citizens owe them this support.