Drought lowered crop production, but farmers earned more [St. Louis Post-Dispatch]
|By Georgina Gustin, St. Louis Post-Dispatch|
|McClatchy-Tribune Information Services|
The figures could stoke debate over crop insurance subsidies in coming months as
The survey, dubbed the Agricultural Finance Monitor, was based on responses from agricultural banks in seven Midwestern states, including
In previous surveys lenders in
As of last week, the bank said,
"The 2012 drought greatly reduced production, but all of our borrowers carried crop insurance," one surveyed lender told the St. Louis Fed. "Many farmers had higher levels of coverage. This has resulted in good income for most, and most will carry that income into 2013."
<p>The government provides insurance for catastrophic losses, up to 50 percent, free of charge. Farmers can then buy private insurance that indemnifies them up to 100 percent. Crop insurance payments are based on the harvest price.
As lawmakers debated the 2012 farm bill last year, crop insurance was a central focus. Both the
Farm groups have said that crop insurance is a critical protection, particularly as severe weather events appear to be on the rise.
But critics point out that taxpayers have been paying an increasing share of the premiums. According to an analysis by the
The group, along with some agricultural economists, believe the premium subsidies are encouraging farmers to farm marginal land, vulnerable to drought and flood. Since 2008, farmers have plowed up acreage the size of
The 2012 Farm Bill was never passed, and instead the previous bill was extended to this September. That means controversial direct payments remain in place as
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