The following excerpt is from an article that originally appeared on Hit and Run Reason
Gina Sanders | DreamstimeWhen crops fail, taxpayers pay.
A popular federal crop insurance program—the Harvest Price Option, or HPO—will cost taxpayers an estimated $21 billion over the next decade in order to guarantee profits for farmers who experience crop failures.
Sen. Jeff Flake (R-Ariz.) and Sen. Jeanne Shaheen (D-N.H.) are aiming to slash agricultural subsidies by eliminating the Option. The bill would keep traditional insurance crop programs in place.
Traditional crop insurance is a safety net protecting farmers during unexpected crop failures. It pays farmers when harvests sell for less than the price predicted at planting season.
An HPO policy guarantees reimbursement based on the highest market price, for example, during a drought that hurts yields and creates a crop shortage that drives up prices. If the crop price at harvest is higher than was anticipated at planting season, and crop yield is lower than expected, farmers with an HPOpost was originally published on this site