However, taxpayers are not on the line for that amount, despite what is reported in the media and by critics of the crop insurance program. While the USDA administers the program, Art Barnaby, Kansas State University risk management specialist, has calculated the government only has about $3 billion in exposure, and crop insurance companies will have to pay the remainder out of their reserve funds. He says many of those companies may think twice about writing crop insurance policies in the Cornbelt.
We will have to see how all of that plays out during Farm Bill testimony on renewing the crop insurance program. Final details will not be known until later in the spring after USDA determines the amount of payments due to farmers who subscribed to county-based crop insurance policies.
And any farmers whose agent reports they will have indemnity payments in excess of $200,000 are reminded that it will not be paid until a three year audit is completed. Those are likely holding up many of the payments, and since many farmers are in that category, USDA will have many employment opportunities for auditors.