Down on the farm
One particularly bad culprit is the harvest price option (HPO) crop-insurance policy. While traditional crop insurance protects farmers from catastrophic losses, those who can afford higher premiums buy an HPO policy. Traditional crop insurance pays farmers when the price at harvest is less than projected prices at planting. But HPO policies guarantee that farmers will be paid either the projected price at planting time, or the market price at harvest — whichever is higher. “This product goes above and beyond the definition of a safety net,” wrote the R Street Institute, a libertarian think tank, in a letter to Congress last year. “It is the crop insurance equivalent of your auto insurer surprising you with a new Cadillac Escalade after you’ve totaled your Toyota Corolla.”
