TOPIC | INDEMNITIES


Keeping Crop Insurance Strong

August 2011

The 2012 budget will likely include modifications and reductions to farm policy. Policy makers should consider 12 essential strengths that make crop insurance the cornerstone of the farm safety net programs. We’ll introduce one strength of crop insurance per month and explain how the sum of these strengths has given us the successful program we have today.

Strength: Producer indemnities are not capped by arbitrary payment limits.

All farm programs have limits on a producer’s annual adjusted gross farm and off-farm income to be eligible for payments. Farm programs also have annual payment limits for all programs except marketing loans.

There are no income caps to be able to buy crop insurance and crop insurance premium subsidies and indemnities are not limited by income or net worth. Additionally, because crop insurance is tailored to the individual’s specific needs, farmers pay a share of their premiums in proportion to the amount of risk they face.