Stop crop insurance boondoggle!

Thanks to the Des Moines Register for the article, “Crop insurance payment soar” on 3/14/2013.  It is not right that we taxpayers are required to subsidize crop insurance premiums for farmers.   I can accept our government administering a crop insurance insurance program if there is no viable private market.  But I cannot understand why taxpayers should subsidize the crop insurance program.  Farmers make higher than average incomes.     Many farmers and farm owners are very wealthy.  Both large corporate farms and wealthy absentee owner investors get Insurance premium subsidies.  Fees and commissions paid to crop insurance companies and sales representatives appear to be very generous.   We need to stop the farm welfare.  Charging the full cost of the insurance to farmers will cause farmers to help keep cost down and prevent abuse.


Stop States from offering special economic incentives

It is not surprising that the Iowa Chamber Alliance advocates that the State of Iowa should provide more money to provide economic incentives for businesses to expand or locate in Iowa.  (See The Des Moines Register, “Study: Iowa is losing its edge on incentives” 3/7/2013.)  The economic incentives paid by States and municipalities to businesses have become obscene.
Our governments should not be in the business of trying to figure out which businesses or industries might be successful in adding good jobs in Iowa.  When governments subsidize businesses, including farmers, we taxpayers take the risks and private individuals reap the benefits.  This is not free-market capitalism, this is crony capitalism – where businesses that have political power are given special favors by governments.
It would be ideal if our U.S. Congress, using their Constitutionally granted Commerce Clause powers – to regulate commerce among the States, would prohibit the States from making any payments, or providing any subsidies that are not generally available to all businesses in the State.  States would still be allowed offer general incentives, like lower taxes, but they would be prohibited from competing based on special incentive given to individual businesses.

Go ahead with Sequestration cuts

Maybe it would be best to let the Sequestration spending cuts to take effect.  It appears that elected politicians are unable to make significant cuts to any specific federal spending items.
If cuts could be prioritized, here would be my short list in order of priority:
  • The Medicare eligibility age should be coupled with Social Security and they both should be gradually moved to age 70.  The federal government should not be responsible to pay for 15 – 30 years of retirement for healthy adults.  (see below)
  • Freeze the dollar amount of federal spending on Medicaid – block grant the money to the states and let States decide on the priorities.  There will always be more demand than there is supply for free medical care.
  • Cut military spending, in actual dollars, by at least 5%.  Let the defense department decide on priorities to give us the best defense that the budget can buy.  We would still have greatest defense on Earth.
  • Eliminate the Dept. of Education – leave education to the states entirely.
  • Limit farm subsidies to $50,000 per farmer maximum, $100,000 per family maximum.  Phase out all subsidies for farmers who have a Adjusted Gross Income between $100,000 and $200,000.  Require 100% of the cost of crop insurance to be charged to the farmers.  Why do we keep paying subsidies to farmers when they have record profits?  Something is wrong.
  • Cut the FEMA budget by 50%, and make States pay a 50% co-insurance payment for all federal money that flows into any State.  States would be much more efficient, and there would be much less abuse and fraud.
  • Eliminate subsidies and special tax breaks for all forms of energy.  All energy producers fight to protect their subsidies by claiming that the other forms of energy get subsidies and all they want is a fair playing field.  Well, lets make the playing field very fair – no subsidies for anyone.
  • Eliminate spending on arts, and humanities, public broadcasting, etc.  Contributions to these kinds of organizations should be left to charitable organizations.

I’m sure the list would be different and much larger if I took enough additional time.

According to data compiled by the Social Security Administration:

  • A man reaching age 65 today can expect to live, on average, until age 83.
  • A woman turning age 65 today can expect to live, on average, until age 85.

And those are just averages. About one out of every four 65-year-olds today will live past age 90, and one out of 10 will live past age 95.

Delay new farm bill.

The Register printed an excellent editorial from Steve Ellis and Scott Faber urging delay on the Farm Bill.  (11/13/2012 – “Congress should pass a fiscally responsible farm bill extension” – see link below)  I agree that Congress should pass a one-year bill extension that is fully paid for by cuts to subsidies for those who do not need taxpayer support.  Farm subsidy payments, if any, should be based on need and should be limited in total dollar amount that any farm, or related group of farms, can receive.  Crop insurance subsidies should also be either eliminated or means tested.  Wealthy farmers should not receive subsidized crop insurance.  The Farm Bill needs to be fully exposed to open debate and to thoughtful deliberation, not rushed through behind closed doors.

Link to DM Register article:


No need for farmers to worry about drought.

Taxpayers should worry about the drought, not farmers. Taxpayers pick up about 60% of the cost of crop insurance.  There is no good reason why taxpayers should subsidize crop insurance.  As with many government programs, there is abuse in crop insurance.  Crop insurance sales agents are paid commissions as high as 20%  of the total premium! This would never take place in a private market.  If nothing else, the full cost should be charged back in premiums and there should be no taxpayer subsidy.  p.s. – Under the proposed Farm Bill, insurance will not only cover crop losses due to weather, but will also cover low prices – so that a profit is pretty much guaranteed.

Farm Bill Pork

On 6/10/2012 The Des Moines Sunday Register reported that Senator Tom Harkin says he is optimistic that a half-trillion-dollar farm bill will be approved by Congress this summer.

The U.S. Senate Committee on Agriculture, Nutrition & Forestry reported: “The bill ends direct payments, streamlines and consolidates programs, and reduces the deficit by $23 billion.”

According to the Congressional Research Service, total Farm Bill Spending has/will be as follows:

2002 – 2007     $241 billion  ($48 billion average per year)

2008 – 2012     $401 billion ($80 billion average per year)

That is a 66% increase!

FYI – The Consumer Price Index for the 5 years from 2006 to 2011 went up 11.6%.  For the 6 years from 2002 to 2008, the CPI went up 19.7%

The Senate proposal calls for:

2013- – 2023 (ten years) $969 billion ($96 billion average per year)

That is a 20% increase!

So, the $23 billion in cuts are really “Washington cuts” – that is, cuts in future projected increases.  There are no real cuts and this bill does not reduce the deficit.  It only reduces the projected increase in the deficit.

We need real cuts!  Let’s start with crop insurance.  The Register reported, “The U.S. Department of Agriculture now pays about 60 percent of farmers’ premiums for crop insurance.”  “Some organizations have argued that the payments are excessive, with more than two dozen farming operations collecting $1 million or more in taxpayer-financed subsidies for crop insurance.”

Why not reduce the crop insurance subsidy to 40% then reduce it by 10% per year until it is phased out.  Then let any private insurance company compete for the business.



Click to access R41195.pdf