Max Baucus: “The perverse operation of crop insurance is that with each successive year's drought, premiums rise but coverage…”

“The perverse operation of crop insurance is that with each successive year's drought, premiums rise but coverage decreases. That is how crop insurance works; namely, premiums rise during years of droughts and coverage declines. Some might ask, why do we need agricultural disaster assistance when we have Federal crop insurance? That is a good point. Federal crop insurance is helpful. Federal crop insurance is widely available in most parts of the country. The fact is, crop insurance today provides less coverage than is needed because of the perverse effect of the operation of the program and does not negate the need to provide natural disaster. Again, to repeat, in successive years of drought, premiums that farmers pay for Federal crop insurance rise and the coverage continues to decline with each year that passes during a natural disaster. That is the way it works because farmers have less of production history, less acreage in a prior year that is available. Add to that, when you have successive years of drought, it might rain this year, as it has in some parts of my State, but that is just the surface soil that is given moisture. It is the subsurface soil down 1, 2, 3 feet that is parched. It is so dry. A lot of crops have roots that go deeper. In addition, very dry subsurface soil has an effect on the moisture content at the surface. So there are many reasons this has just mounted.…”