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Published April 05, 2010, 09:00 AM

Time to make a frugal switch

ALEXANDRIA, Minn. — As USDA’s Risk Management Agency struggles to renegotiate a new standard reinsurance agreement with private crop insurers, why isn’t Agriculture Secretary Tom Vilsack directing USDA-RMA officials and local county FSA employees to put a true government alternative on the table to address the runaway costs of federal crop insurance?

By: Alan Roebke,

ALEXANDRIA, Minn. — As USDA’s Risk Management Agency struggles to renegotiate a new standard reinsurance agreement with private crop insurers, why isn’t Agriculture Secretary Tom Vilsack directing USDA-RMA officials and local county FSA employees to put a true government alternative on the table to address the runaway costs of federal crop insurance?

Without a true alternative on the table, the private insurers have the upper hand in retaining their insurance gravy train in which American taxpayers bare the risk and private insurers profit, as pointed out in the taxpayer funded Milliman report to USDA.

Riding the gravy train

USDA data show the taxpayer cost for crop insurance for the 2007 crop at $3.8 billion and jumping to $7.7 billion for the 2008 crop, costing taxpayers more than the traditional farm subsidy checks sent for the 2008 crop. All of is happening during a period of good yields and near-record prices for major crops, but it’s still not newsworthy to the national press, even as health care and deficit debate rages over costs.

This lucrative federal program quietly protects farmers enjoying the best of times without a national examination of them or their agents.

What taxpayers and Congress fail to understand is that local county farm service centers have the data and factual relationships with farmers to deliver the program at a fraction of the cost of private insurers. Yet where are the congressional budget hawks to hold an independent public hearing to consider this real government option for major cost saving for today’s taxpayers?

It doesn’t make ‘cents’

The missing fact of life for local USDA office sites and FSA employees is the need to retain the local locations and jobs. As President Obama and Congress are forced to bring spending cuts in line to address the federal deficit, why aren’t these local FSA employees addressing the economic environment they are in? Just as post office cuts are taking place both nationally and in rural areas, the same likely can happen with FSA offices if they don’t become pro-active.

For today’s financial reality, farmers no longer need the historic direct payment subsidies that were the basis for these offices. Our financially strong farmers only need a sound commodity loan program to manage crop inventories to address fair market pricing. Administrating crop insurance with much lower costs can be the FSA offices’ 2010 innovation.

The present buffet of federal crop insurance options available to America’s farmers is an outrage. In 2010, the premium subsidies are paying as much as 81 percent of the cost of insurance for millionaire farmers, with no subsidy limits and many options for insurance-driven profits. All of this as 47 million needy Americans go without health insurance. So where’s the justice, President Obama, Secretary Vilsack and members of Congress?

Editor’s Note: Roebke, a former farmer, lives in Alexandria Minn.

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