Quite possibly they maybe…the world overÂ theyÂ are rent seekers,Â alwaysÂ demanding the taxpayer cough for this or for that, and expect everyone to feel sorry for them when some weather event stuffs up their livelihood:
In the US crop insurance is highly subsidised…and is causing major problems:
Â The worst drought in 50 years could leave taxpayers with a record bill of nearly $16 billion in crop insurance costs because of poor yields.
The staggering cost of the program has drawn renewed attention, as the Obama administration and Congressional Republicans wrangle over ways to cut the deficit. Last month, Treasury Secretary Timothy F. Geithner said that reducing farm subsidies was one way that the administration could cut government spending. But Congress has resisted.
The Agriculture Department, which runs the program, said that the total losses from crops harvested last year would not be known for weeks, but that costs from the program were estimated to be $15.8 billion, up from $9.4 billion in 2011.
Separately, a record $11.4 billion in indemnities for crop losses has been paid out to farmers, and officials say that number could balloon to as much as $20 billion. In 2011, a then-record $10.8 billion was paid out in indemnities.
The crop insurance program has drawn criticism from a wide range of groups, including theÂ Environmental Working GroupÂ and the conservativeÂ Heritage Foundation, two Washington research groups, which say that the costs need to be reduced and that the program mainly benefits insurance companies and large farmers. Farmersâ net income for 2012 is expected to be $114 billion, down 3 percent from 2011 but still the second highest in 30 years.
So farmers are making more than ever but expecting taxpayers to subsidise their insurance?
Thomas P. Zacharias, the president of National Crop Insurance Services, an industry trade group, defended the program, saying that the record crop losses last year showed the need for insurance.
âThis year, most farmers will be able to rebound from historic drought, thanks to crop insurance,â Mr. Zacharias said.
The federal crop insurance program dates to the Dust Bowl era of the 1930s, when Congress created the taxpayer-subsidized insurance to protect farmers against crop losses. Today, the government pays about 62 percent of the insurance premiums. The policies are sold by 15 private insurance companies that receive about $1.3 billion annually from the government. The government also backs the companies against losses.
Government documents show that taxpayers have paid nearly $7 billion so far to subsidize premiums for 2012. The documents also show that taxpayers could pay another $7 billion to underwrite losses by the insurance companies and other costs.
âEssentially, taxpayers are hit twice by the cost of the program,â said Bruce A. Babcock, an agriculture economist at Iowa State University.
President Obama has proposed cutting crop insurance subsidies and reducing the amount paid to insurance companies, saving $4 billion over 10 years.
What is it with farmers, always expecting the government to bail them out.Â Why can’t they get insurance from the private sector like the rest of us.