Northeast Nebraska and Candelaria Philippines | Heathcliffslocum - 10/21/2015 23:17
Government subsidies artificially remove risk. Subsidized insurance lets bigger operations assume more risk and allows them to take on more land. This allows them to get bigger due to the unintended consequences of suppressed rates. Yes it sounded good at the time when they wrote the bill, but this crop insurance game, frankly does not help young guys out at all.
I don't know how to put this nicely... You are wrong.
1. crop insurance allows young guys to weather the storm... For example the 2012 drought where we raised 10 bushel corn here.
2. Large operators are buying lower coverage levels. They manage risk in other ways. For example by farming in 7 counties, they can manage risk by avoiding a hail storm. A small operator may need the coverage, as his farms are all close and a hail storm could easily get them all. Not all, but for the most part, the large operators have a stronger balance sheet and can assume some risk themselves, that the small and growing producer can't. |
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