Crop Insurance In The Crosshairs

The Atlantic:

"In a way, it's backwards how historically we've tried to run safety net programs," said Johnson. "As a general rule, one would think when commodity prices are high -- particularly when yields are strong -- the need for the farmers should fall. The way crop insurance is currently structured, that is not what happens. Because of all these revenue products, taxpayer costs go up when the market goes up. It's a difficult issue to sell to the public. It is a difficult issue to resolve."
As prices in the market rise, so do premiums to insure the increasingly expensive crops. Without caps to the program, taxpayer contributions can go up as far as prices will take them.
"Under today's policy, you can farm a county, you can farm two counties and we will still pay 100 percent of that subsidy amount. It's insane policy," said Ferd Hoefner, policy director for the National Sustainable Agriculture Coalition.
In 2000, the government paid $1.35 billion to subsidize premiums. That figure rose to more than $7 billion in 2011 -- a result of more acreage covered and higher market prices.
Placing a cap on premium subsidies can be difficult, said Collins, who chaired the Federal Crop Insurance Corporation for seven years and who now works for the trade association National Crop Insurance Services. "You are trying to insure stability of businesses. Saying only a certain portion of the value of your business can be insured wouldn't make much sense to me."

Things are going to get interesting.  With the record commodity prices, the new Farm Bill is going to be really interesting.  How will the politicians balance deficit cutting with electoral politics.  I wouldn't bet against the ag interests in that one.