July 15--Today is the last day farmers have to file acreage reports to their crop insurance agent.

If that sounds like just another ag note on the business page, hold on.

Because you're going to hear a lot about federal crop insurance in a drought year.

Alan Guebert, the Delavan resident who writes a nationally syndicated column on agriculture, is getting the word out.

"As you read this, 2012 crop insurance payouts are likely growing by $1 billion or more per week because of the spreading drought in the corn-soybean Midwest," he noted in this week's column.

Guebert interviewed Iowa State University economist Bruce Babcock, a crop insurance critic who fears that payouts could top $30 billion this year.

In Illinois, insurance payments for corn alone could exceed $3 billion, noted Guebert, citing estimates from Gary Schnitkey, a University of Illinois Extension economist.

We're not begrudging farmers for receiving insurance payments when disaster strikes.

The problem is who's actually footing the bill for most of the cost. Federal crop insurance works a little differently than the kind you get from State Farm or Allstate for your car. According to the Washington, D.C.-based Environmental Working Group, U.S. taxpayers pick up almost two-thirds of the cost -- 62 percent -- of crop insurance.

Another problem is that we're dealing with a war of words in this country. Crop insurance is being touted in the new farm bill now being shaped in Washington as a reform measure in lieu of direct payments to farmers. Senate and House versions have been approved and now await action by a conference committee to forge the final version.

Estimates are that the crop insurance in the Senate version would cost taxpayers about $9 billion a year. Estimates are even higher with the House version.

The Senate actually made some effort to curb rising crop insurance costs. An amendment offered by Sen. Dick Durbin, D-Ill., and Sen Tom Coburn, R-Okla., calls for raising premiums by 15 percent for farmers with incomes over $750,000.

Durbin said his amendment would affect only about 1,500 farmers, while Coburn said it could save taxpayers $1 billion.

Sen. Pat Roberts, R-Kansas, said the provision could lead to low crop insurance participation, forcing the government to concoct expensive bailouts when needed.

Make no mistake; Crop insurance is a big deal. This from a release last week for the Bloomington-based Illinois Farm Bureau; "During more than a year of policy review from June 2010 to August 2011, IFB members agreed that crop insurance is by far the most valuable component of the farm policy safety net and should serve as the cornerstone of the 2012 farm bill."

Guebert says he doesn't blame farmers for buying as much crop insurance as they can. "It's a terrific bargain; taxpayers picked up $7.4 billion of last year's $11.9 billion national cost," he said.

Farmers may be looking for rain, but U.S. taxpayers are looking for relief. Let's hope the glare of a hot, dry season puts the spotlight on the federal crop insurance program and the need for change.

Steve Tarter is Journal Star business editor. Business Watch appears here each Sunday. Tarter's phone number is 686-3260, and his email address is starter@pjstar.com. Follow his blog, Minding Business, on pjstar.com and follow him on Twitter @SteveTarter.

___

(c)2012 the Journal Star (Peoria, Ill.)

Visit the Journal Star (Peoria, Ill.) at www.PJStar.com

Distributed by MCT Information Services