Rethinking crop subsidies
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MARK AUSTIN THOMAS: Congress gets started on the Farm Bill next week, and some on Capitol Hill are already wondering how the government can insure new biofuel crops that aren’t time-tested. Jeremy Hobson has more from Washington.
JEREMY HOBSON: The U.S. spends billions of taxpayer dollars every year subsidizing crop insurance, but some crops aren’t covered.
At a congressional hearing earlier this week, lawmakers heard about potential crops like camelina, a weed that’s being looked at as an alternative source of energy.
Some argue that without the coverage, farmers won’t be inclined to start growing it. But there’s a dilemma. Brent Doane is with the Risk Management Agency, which develops crop insurance policies.
BRENT DOANE: When we develop a policy and we’re going to be using taxpayer dollars to pay for that, we want to make sure that it’s something that is truly needed.
It can take farmers years to determine whether a crop is viable. And insurers need time to develop the proper balance between premiums and payouts. And there are other questions.
DOANE: How marketable will that product be? Will there be a lot of producers that want it or is it just going to be one where we sell four or five policies but there is an enormous expense to develop that policy?
Markup of the farm bill begins in the House next week.
In Washington, I’m Jeremy Hobson for Marketplace.
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