The meaning behind means testing for crop insurance

Nancy Marshall-Genzer Jun 11, 2013
HTML EMBED:
COPY

The meaning behind means testing for crop insurance

Nancy Marshall-Genzer Jun 11, 2013
HTML EMBED:
COPY

Right now, if you’re a farmer and you buy crop insurance, the government pays about 60 percent of your premium no matter how much money you make. The Senate bill says, if you have adjusted gross income over $750,000, the government will chop your crop insurance subsidy by 15 percent.

“It starts to apply the same sorts of limits to crop insurance subsidies that we have traditionally applied to other farm subsidies,” says Scott Faber, a lobbyist with the Environmental Working Group.    

Harwood Schaffer, a farm policy researcher at the University of Tennessee, worries the means testing could lead some farmers to go without insurance. 

“So yeah, there are people that are big enough and have enough assets to carry them through,” he says.  “And at some level they will go bare.”

Or Schaffer says they could decide not to shake off their insurance coverage. And reorganize their farms so they fall below the $750,000 income limit. There is nothing in the Senate bill to prevent that — and by the way, there is no means testing at all in the farm bill being considered by the House. 

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.