Crop Insurance: Vital For America’s Farmers
By Mike Becker
The National Association of Professional Insurance Agents is compelled to respond on behalf of our clients, America’s farmers, to the irresponsible assertions contained in an August 26 op-ed by Mr. Eli Lehrer, vice president of The Heartland Institute.
The article in question advocates the total elimination of the federal crop insurance program, calling it a waste of taxpayer dollars and an “egregious” example of welfare for business. It goes on to admit such an action would force farmers out of business and dismisses this out of hand.
Crop insurance is America’s greatest agricultural safety net and serves a function that isn’t available solely in the private market. The program relies on a strong public/private partnership and offers farmers market-based risk management tools to ensure the stability of their product. Federal subsidies are provided to encourage producers to purchase coverage at higher levels. This taxpayer investment yields incredible returns for Americans by ensuring domestic food security, a stable agricultural economy (along with the tax revenue it produces) and a positive international balance of trade in crops.
Quite frankly, it is difficult to keep track of Mr. Lehrer’s contradictions on the matter of compensation for insurance agents. In his August 26 op-ed, he contends that the commissions received by crop insurance agents are “enormous” and that they serve to “reduce competition between the companies that write crop insurance.” However on April 25 of this year, Mr. Lehrer wrote another article entitled “Government Has No Business Dictating Agent Compensation,” published in the National Underwriter (http://www.propertycasualty360.com/2011/04/25/government-has-no-business-dictating-agent-compen), in which he states that insurance carriers being free to provide additional commission incentives to agents “increases the financial soundness and competitiveness of insurers.” Which is it?
Mr. Lehrer’s statements in his August article completely contradict his statements in his April article, in which he concluded that “self-proclaimed consumer advocates who want to modify compensation for insurance agents and brokers don’t know what they’re talking about.” He was right in April and he’s wrong now.
Mr. Lehrer has either failed to understand the incredible value of the crop insurance program and the service that insurance agents provides, or he has chosen to ignore it. Incredibly, he actually admits that terminating the crop insurance program as he recommends would cause many farmers to shut down their operations. His attitude toward farmers forced out of business seems to be, “tough luck.” How does this help our farm economy?
Perhaps most disturbing is his assertion that the crop insurance program “is not a public benefit by any reasonable definition of the term.”
Enabling American farmers to produce the food that feeds millions of Americans and millions of people around the world is “not a public benefit?” Far from being reasonable, obliterating crop insurance and forcing farmers out of business is a dangerously destructive proposal.
Anyone who consumes food is a major beneficiary of crop insurance. So too is our economy, as well as America’s competitiveness in foreign markets.
Any call to terminate the federal crop insurance program is preposterous. This proposal is being advanced under the banner of the need to cut the federal budget, but we suspect it is part of an agenda that has nothing to do with farming. When you evaluate where savings could be achieved in the federal budget, you cannot start with the assumption that all government involvement in everything is unnecessary. You also cannot look at just the expense side of the ledger. You have to consider what is being invested, balanced by the return on that investment.
When you objectively view the successful public/private partnership in crop insurance, taxpayers are the big winners. America’s agriculture safety net provides domestic food security, a net positive in international trade, strong farms, strong rural communities and the world’s most productive agricultural sector. That benefits our entire economy and is an excellent return on a very modest investment.
We cannot allow our food supply, our agricultural economy and our rural communities to become collateral damage in a war against all government. Proposals such as this that would wreck the world’s most productive and successful agricultural economy should be ignored.
Mike Becker is Assistant Vice President of Federal Affairs for the National Association of Professional Insurance Agents (PIA National).