On crop insurance…

“The mix of support that U.S. farmers receive the government has changed over time. We’re going to be making fewer payments under traditional programs over the next 10 years compared to the last decade.

“Unless there’s a change in policy, they’ll still get direct payments. But the amount received will be modest for the marketing loan and countercyclical payment programs and for ACRE unless we see a dramatically different market situation than is currently anticipated.

“Direct payments account for the vast majority of our traditional farm support. That’s a rather flat number – around $5 billion for year.

“On the other hand, two things will likely result in much higher levels of crop insurance support paid out to farmers over the next decade. First, higher prices for all major crop commodities translate into higher crop insurance premiums. Since premium subsidies from the government are, essentially, a proportional value of the total premiums, that means higher crop prices also mean higher government premium subsidies. Second, we’ve had abnormally low crop insurance losses in recent years. With more typical weather variability, we could have a higher average level of indemnities paid for losses.

“So, over the next decade, our baseline is showing indemnities paid to farmer for losses, minus what they pay for premiums (net indemnities) to be roughly equal in value to direct payments, on average. That’s a very different story than what it’s been in the past and shows how important crop insurance has become.”