Campaigns & Elections: Three-Legged Ag-Policy Stool Grows Wobbly

Crop insurance is the latest leg of the ag-policy stool to face scrutiny and possible trimming. The result could be more consolidation in the insurance industry and tighter lending from banks for farmers.

flag wheat photo 001A series of difficult situations from the 1970s and 80s that resulted in a farm recession led to major revamping of U.S. farm policy in the 1990s. The result was a “three-legged policy stool” for major commodities built on crop insurance, price support payments, and support of biofuels and other expanded markets for farm commodities.

But not everyone in Congress agrees with current farm policy. Some members have been whittling away at the policy stool through repeal of Country of Origin Labeling, declining support for ethanol and renewable fuel standards, and now, crop insurance.

Farm programs administered through U.S. Department of Agriculture are always popular targets for cost cutters because of the relatively low number of rural farm-state members of Congress. Sometimes even key Republican supporters don’t act like farm advocates when the likes of House Agriculture Committee Chairman Mike Conaway of Texas and Senator Pat Roberts of Kansas called for the repeal of Country of Origin Labeling. Now both Conaway and Roberts are under heavy pressure to defend crop-insurer profits or bear the wrath of farmers back home after a proposed budget deal that threatens to consolidate the crop insurance industry. Crop insurance, a key component of current farm law, might even become unavailable for the first time in decades if the insurance industry as a whole deems it not worth doing. That’s a real possibility.

Disproportionate proposed cuts to USDA programs are nothing new. Crop-insurer cuts made earlier in the current farm bill have already resulted in consolidation of the industry. Coming at a time when prices at the farm gate have fallen below break-even, sawing a leg off the stool could make it impossible for some farms to obtain the loans they rely on to operate, as bankers follow insurers out the door.

Missouri farmer Richard Oswald writes the Letter from Langdon for the Daily Yonder. 

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