Cash for Doomed Crops Means U.S. Farmers Avoid Disaster Costs

[xchrom]

http://www.bloomberg.com/news/2013-05-01/cash-for-doomed-crops-means-u-s-farmers-avoid-disaster-costs.html

When dry weather destroyed Leonard McKissick’s soybeans last year, U.S. government-backed insurance paid him $40,000, the bulk of his loss.

Across the Arkansas Delta this spring, farmers such as McKissick are sowing fields that suffered the worst drought in more than half a century. Even though crops may fail again, landowners are shielded by taxpayers from the full burden of their bad bets.

Drought helped drive the cost of crop insurance to a record $17.2 billion, the U.S. Department of Agriculture said April 29. The government covers more than 60 percent of payouts, spending about seven times more than a $1.4 billion program that helps farmers adapt to climate change.

The subsidies encouraging farmers to ignore addressing extreme weather are harder to justify when automatic budget cuts remove 5 percent from most U.S. programs and lawmakers prepare to craft a new five-year farm law.


***disclaimer: i believe in subsidies for small farms -- for crop diversity, etc
not for mega agri-business, and mono culture.