Crop Insurance Today November 2013 - (Page 25)

CropInsurance TODAY Ten Considerations Regarding the Role of Crop Insurance in the Agricultural Safety Net By Thomas P. Zacharias and Keith J. Collins Crop insurance is widely supported, and the program has expanded to become the primary component of the farm safety net. Yet, the program's support and growth has engendered significant criticism for its level of subsidization and other aspects. Such a tension, especially during development of a new farm bill, seems natural and appropriate for a program with rapidly growing taxpayer exposure. From our vantage, employed by National Crop Insurance Services, a 501(c)(6) non-profit organization funded by the crop insurance industry, in this article we offer a within-the-industry perspective on the program status and key issues. acknowledgement and protective action by the government and is fundamental to government programs across all major essential industries, such as energy, housing, and health care. Based on legislation and the mission and goals of the U.S. Department of Agriculture (USDA), there appears to be a public benefit or, at a minimum, a public interest in maintaining a resilient and financially sustainable national agriculture by assisting producers in need or helping to make available the tools for them to protect their operations. Of course, specific actions taken to serve the public interest should be subject to cost-benefit analysis and standards which may also serve as evidence of a public interest. The 10 Considerations 2. Should there be taxpayer (government) support for a farm safety net? 1. Is there a public interest in a resilient, financially sustainable and competitive industry that produces the nation's food and is subject to natural disasters and other shocks? Without relying on formal empirical support or a social welfare metric, and understanding the vagueness of the term, we believe there is such an interest. An issue of "public interest" usually merits If there is a "public interest" in financial stability in agriculture, should there be public support? This is, of course, a normative question. History of most developed nations indicates a socially revealed preference for some form of public economic support for agriculture, specifically for farmers. Critics of farm programs call for reduced, if any, federal support for the safety net, citing interference with the efficiency of free markets and relative farm prosperity. At this juncture in CROPINSURANCE TODAY® 25

Table of Contents for the Digital Edition of Crop Insurance Today November 2013

Gettin' By on Gettin' Bys...
Helping Farmers and Ranchers: Developing Risk Management Plans
NCIS Adjuster Schools Big Success
1890 Scholarship Recipients
Ten Considerations Regarding the Role of Crop Insurance in the Agricultural Safety Net
Crop Insurance In Action
Kent A. Petersen Retires
In Memory Bill Hanson

Crop Insurance Today November 2013