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PIA Rebuts Attack on Crop Insurance Agents

PIA National has defended the crop insurance program and agents who sell crop insurance from an attack on both. In an opinion article in the...
September 7, 2011

PIA National has defended the crop insurance program and agents who sell crop insurance from an attack on both. In an opinion article in the Grand Forks Herald (North Dakota), Eli Lehrer,  vice president of Washington operations for The Heartland Institute and national director of the institute's Center on Finance, Insurance and Real Estate, argues that the U.S. crop insurance program is a waste of taxpayers' money, and the $6.5 billion spent on it each year is an egregious example of welfare for business. Lehrer argues for the complete elimination of the crop insurance program. He goes on to say that agents who sell the policies get "enormous commissions" that serve to "reduce competition between the companies that write crop insurance." Interestingly, in an April 2011 article in the National Underwriter, Lehrer states that insurance carriers being free to provide additional commission incentives to agents "increases the financial soundness and competitiveness of insurers." So, which is it?

Lehrer is a member of a coalition, GreenScissors, which has also called for the elimination of the National Flood Insurance Program (NFIP). This unusual coalition includes representatives of the environmental group Friends of the Earth, Taxpayers for Common Sense and Public Citizen, an advocacy group founded by Ralph Nader.

"Any call to terminate the federal crop insurance program is preposterous," said PIA National Assistant Vice President of Federal Affairs Mike Becker, in a statement to BestWire. "When any group evaluates where savings could be achieved in the federal budget, you cannot start with an assumption that all government involvement in everything is unnecessary. You also cannot look at just the expense side of the ledger. You have to consider what is being invested, balanced by the return on investment. When you view the successful public/private partnership in crop insurance this way, taxpayers are the big winners. America's agriculture safety net provides domestic food security as well as a net positive in international trade, which benefits our entire economy. That's an excellent return on a modest investment."

Separately, PIA National penned an op-ed at the request of the Grand Forks Herald, which is a full-throated rebuttal of Mr. Lehrer's viewpoint. You can read an advance copy of our op-ed response here.

"Mr. Lehrer has either failed to understand the incredible value of the crop insurance program and the service that insurance agents provides, or he has chosen to ignore it," the PIA article states.  "Incredibly, he actually admits that terminating the crop insurance program as he recommends would cause many farmers to shut down their operations.  His attitude toward farmers forced out of business seems to be, 'tough luck.'  How does this help our farm economy?"

Read PIA National's response to Lehrer's article: PIA Op-ed Defending Crop Insurance Agents (9/2/11)

Read the entire Lehrer article: Eli Lehrer Article Attacking Crop Insurance (Grand Forks ND Herald 8/28/11)

Read more on Eli Lehrer's attack on crop agents: Coalition Calls for End Of Crop, Flood Insurance Programs (BestWire 8/31/11)

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