Most of us don't go through life
thinking about crop insurance. But on
the expanse of the prairie in South
Dakota, in a waving sea of golden grass,
it's a huge issue.
Farmer Bryan Kroeplin is a nervous ball
of energy as he watches thrumming
combine harvesters carve through his
winter wheat.
The 54-year-old is anxious about a lot
of things, including approaching
thunderstorms as well as our presence.
He tells me about another journalist who
came through asking lots of questions.
Turns out he wasn't a reporter at all,
but someone scouting local farming
opportunities. This is important because
the Kroeplin family doesn't own their
farmland, they rent.
But I know he's warmed up when he
eventually introduces his father and
lets my cameraman colleague take a spin
behind the wheel of a huge tractor. As
it vanishes over the horizon, he
casually mentions that it's worth
$390,000.
Bryan plants wheat, corn, soybeans and
sunflowers on 10,000 hectares and goes
on to explain that he spends roughly
half a million dollars a year on
insurance premiums, buying yield and
much more expensive revenue protection
policies.
In 2010, the US government gave him a
staggering $300,000 back.
Four years ago, Bryan Kroeplin says he
was nearly broke, but thanks to some
canny decisions underpinned by his
subsidised insurance and high commodity
prices, he's back on his feet and
looking to rent more land.
American taxpayers pay roughly 60 per
cent of the cost of crop insurance
premiums across a range of policies. Ten
years ago, around 30 per cent of
American farms bought coverage; now 83
per cent of farmland is covered by
government-subsidised insurance.
It's a river of public money, which goes
some way to explaining why the insurance
industry is working hard to lobby
politicians as Congress considers
cutting subsidies under a new US farm
bill.
PHOTO: South Dakota wheat harvest
farmers (Dan Sweetapple)
Research by the Washington DC-based
Environmental Working Group (EWG) shows
taxpayers also contribute to the
administrative costs of private
insurance companies in the program, and
the US government is still liable for a
share of payouts when crops fail.
Over 10 years, the cost of America's
subsidised crop insurance scheme has
grown from $2 billion to nearly $9
billion a year.
An advocate for cutting subsidies, EWG
says the crop insurance industry is now
spending more than traditional farm
groups on lobbying and political
contributions to politicians on the
powerful House and Senate agriculture
committees.
The headline in US farm bill media
coverage so far has been a move to cut
billions of dollars in direct payments
to farmers, money they were getting
regardless of market prices, which the
American Farm Bureau argues makes
subsidised insurance a much better deal
for taxpayers.
It's also a great deal for US megafarms.
The biggest 10 per cent of farms pocket
three quarters of the insurance subsidy
money, which the farm lobby argues is
justified on a per unit basis. It
doesn't want any means testing or
changes to payment limits, even though
these same businesses have been highly
profitable in recent years.
PHOTO: South Dakota wheat harvest silos
(Dan Sweetapple)
There's even a push to add a shallow
loss-subsidised insurance program to the
mix, but with Washington sinking under
trillions of debt, the prospect of
handing out more to farmers and their
insurers doesn't sit well with the Tea
Party crowd or the Republican speaker
John Boehner.
As a consequence the farm bill has been
stuck in Congress, though a worsening
Midwest drought is leading some
politicians to call for action.
Consumer groups warn that an expanded
farm insurance program would encourage
overproduction and could wind up costing
US taxpayers billions of dollars more
over the next decade.
Back on the prairie, when I ask South
Dakota crop grower Bryan Kroeplin what
he'd tell an Australian farmer who
doesn't get government subsidies for
insurance, he laughs awkwardly before
offering...
… Good luck, I mean, I don't know the
situation over there. This has been this
way for ever, so we don't know no
different.
No one outside the farm community talks
about crop insurance. It's boring and
complicated. And that's just the way the
vested interest groups like it.
thinking about crop insurance. But on
the expanse of the prairie in South
Dakota, in a waving sea of golden grass,
it's a huge issue.
Farmer Bryan Kroeplin is a nervous ball
of energy as he watches thrumming
combine harvesters carve through his
winter wheat.
The 54-year-old is anxious about a lot
of things, including approaching
thunderstorms as well as our presence.
He tells me about another journalist who
came through asking lots of questions.
Turns out he wasn't a reporter at all,
but someone scouting local farming
opportunities. This is important because
the Kroeplin family doesn't own their
farmland, they rent.
But I know he's warmed up when he
eventually introduces his father and
lets my cameraman colleague take a spin
behind the wheel of a huge tractor. As
it vanishes over the horizon, he
casually mentions that it's worth
$390,000.
Bryan plants wheat, corn, soybeans and
sunflowers on 10,000 hectares and goes
on to explain that he spends roughly
half a million dollars a year on
insurance premiums, buying yield and
much more expensive revenue protection
policies.
In 2010, the US government gave him a
staggering $300,000 back.
Four years ago, Bryan Kroeplin says he
was nearly broke, but thanks to some
canny decisions underpinned by his
subsidised insurance and high commodity
prices, he's back on his feet and
looking to rent more land.
American taxpayers pay roughly 60 per
cent of the cost of crop insurance
premiums across a range of policies. Ten
years ago, around 30 per cent of
American farms bought coverage; now 83
per cent of farmland is covered by
government-subsidised insurance.
It's a river of public money, which goes
some way to explaining why the insurance
industry is working hard to lobby
politicians as Congress considers
cutting subsidies under a new US farm
bill.
PHOTO: South Dakota wheat harvest
farmers (Dan Sweetapple)
Research by the Washington DC-based
Environmental Working Group (EWG) shows
taxpayers also contribute to the
administrative costs of private
insurance companies in the program, and
the US government is still liable for a
share of payouts when crops fail.
Over 10 years, the cost of America's
subsidised crop insurance scheme has
grown from $2 billion to nearly $9
billion a year.
An advocate for cutting subsidies, EWG
says the crop insurance industry is now
spending more than traditional farm
groups on lobbying and political
contributions to politicians on the
powerful House and Senate agriculture
committees.
The headline in US farm bill media
coverage so far has been a move to cut
billions of dollars in direct payments
to farmers, money they were getting
regardless of market prices, which the
American Farm Bureau argues makes
subsidised insurance a much better deal
for taxpayers.
It's also a great deal for US megafarms.
The biggest 10 per cent of farms pocket
three quarters of the insurance subsidy
money, which the farm lobby argues is
justified on a per unit basis. It
doesn't want any means testing or
changes to payment limits, even though
these same businesses have been highly
profitable in recent years.
PHOTO: South Dakota wheat harvest silos
(Dan Sweetapple)
There's even a push to add a shallow
loss-subsidised insurance program to the
mix, but with Washington sinking under
trillions of debt, the prospect of
handing out more to farmers and their
insurers doesn't sit well with the Tea
Party crowd or the Republican speaker
John Boehner.
As a consequence the farm bill has been
stuck in Congress, though a worsening
Midwest drought is leading some
politicians to call for action.
Consumer groups warn that an expanded
farm insurance program would encourage
overproduction and could wind up costing
US taxpayers billions of dollars more
over the next decade.
Back on the prairie, when I ask South
Dakota crop grower Bryan Kroeplin what
he'd tell an Australian farmer who
doesn't get government subsidies for
insurance, he laughs awkwardly before
offering...
… Good luck, I mean, I don't know the
situation over there. This has been this
way for ever, so we don't know no
different.
No one outside the farm community talks
about crop insurance. It's boring and
complicated. And that's just the way the
vested interest groups like it.
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