PEORIA, Ill. — Criticized inefficiencies in the USDA Risk Management Agency’s (RMA) crop insurance program have been under the spotlight for many years.

Bruce A. Babcock, a National Corn Growers Assoc. consultant, said taxpayers paid more than $22 billion in 2000-07 to deliver $11 billion in net farm payments.

This is “making crop insurance one of the least efficient means by which taxpayers support the farm sector,” he said.

In 2007 the federal government collected $6.5 billion in crop insurance premiums while paying $3.2 billion in losses, said Babcock, who wrote Corn Belt Contributions to the Crop Insurance Industry 2008. Most, if not all, of the inefficiencies detailed by Babcock remain true three years later, as Congress prepares to draft the 2012 farm bill.

“The scale of this inefficiency is well-known,” he opined. “What is difficult to understand is why the program persists in its present form when more efficient risk management programs could be adopted in the farm bill.

“One explanation is that campaign contributions from crop insurance companies and agents have persuaded key members of Congress to support continuation of the program. An alternative explanation is that farmers in certain regions excessively benefit from the program and that members from these regions are protecting the interests of their farmers.”

Babcock produced charts and graphs depicting the advantage Great Plains producers’ hold over Corn Belt farmers because of an imbalance in assigned loss ratios. “Great Plains states all have ratios greater than 2.0, while farmers in the five Corn Belt states all have ratios less than 2.0. This shows that farmers in the Great Plains have benefited far more than have Corn Belt farmers from crop insurance,” said Babcock, adding that Illinois, Iowa and Indiana all have assigned loss ratios of less than 1.0.

“This means that farmers in these three states have paid more dollars in premiums than have been returned to them in indemnities. That is, far from receiving subsidized premiums, Corn Belt farmers have, in fact, been paying more into the program than they have gotten in return,” he concluded.