Quantcast

Subsidies to Industrial Crop Farmers Costs Taxpayers $8 Billion

Environmental Working Group

A new report on subsidized federal revenue insurance for industrial crop farmers shows that the government has failed to control its costs and big insurance companies and agents continue to reap billions of dollars in windfall profits. Environmental Working Group (EWG), which has long advocated meaningful reform of this misguided policy, commissioned economics professor Dr. Bruce Babcock of Iowa State University to do the analysis.

“It confirmed our worst fears,” said Craig Cox, EWG’s senior vice president of Agriculture and Natural Resources.

According to the report, program costs have increased exponentially—tripling to $8 billion since 2000—and the insurance policies have enticed farmers to buy the most expensive policies, which carry high premiums that are heavily subsidized by taxpayers.

“This insurance can pay out even if a farmer has not suffered any loss and duplicates the coverage farmers can obtain from traditional commodity programs,” Dr. Babcock wrote.

His analysis comes as top Congressional agriculture leaders draft sweeping changes to farm policy behind closed doors and try to pass them off as reform. One proposal they are pushing would replace the wasteful direct payment program with an even more generous insurance program that guarantees growers a certain level of income.

“At a time when the agriculture economy is white-hot, providing additional billions of dollars to benefit the richest of corporate agriculture businesses is indefensible,” Cox said.

Big agriculture lobbyists and their supporters in Congress want to block deficit reduction cuts to revenue insurance, arguing it has already been trimmed. In 2010, the U.S. Department of Agriculture and insurance companies struck a deal that was supposed to reduce excessive profits going to insurers and agents. Dr. Babcock’s analysis shows that it has barely made a dent.

“Congress should take a close look at what exactly was cut in the 2010 agreement as well as why the program’s costs have grown so rapidly,” Babcock wrote. “Neither the integrity of the program nor farmers’ benefits was affected.”

EWG is calling for an open, democratic debate that includes input from reformers who want to protect working farm and ranch families and provide a true safety net.

EWG’s recommendations include:

• Eliminate direct payments, counter-cyclical payments, loan deficiency payments, ACRE (Average Crop Revenue Election) and SURE (Supplemental Revenue Assistance Payments). (Savings—$57 billion over ten years).

• Provide every farmer with a free crop insurance policy that covers yield losses of more than 30 percent and eliminate federal premium and other subsidies for revenue-based or other crop insurance products. (Savings—$26 billion just in premium subsidies over 10 years).

• Have the federal government take bids from insurance companies to service the policies, eliminating windfall profits and encouraging the private sector to develop and offer innovative options for farmers to increase their insurance coverage—but not at taxpayers’ expense.

• Require producers to meet a basic standard of conservation practices in order to be eligible for publicly financed crop insurance.

• Ensure full transparency by requiring the U.S. Department of Agriculture to make available information about who is getting the free policies, the taxpayer cost of providing those policies and how much farmers in insurance payouts.

These proposals would save $80 billion over 10 years—nearly four times more than the $23 billion proposed by the agriculture committees.

“With nutrition and conservation funding and an array of programs that support healthy, local food all under the knife, budget cutters must not let themselves be used as pawns in the subsidy lobby’s chess game,” Cox said.

For more information, click here.

EcoWatch Daily Newsletter

An American flag waves in the wind at the Phillip Burton Federal Building in San Francisco, California on May 17 where a trial against Monsanto took place. Alva and Alberta Pilliod, were awarded more than $2 billion in damages in their lawsuit against Monsanto, though the judge in the case lowered the damage award to $87 million. JOSH EDELSON / AFP / Getty Images

By Carey Gillam

For the last five years, Chris Stevick has helped his wife Elaine in her battle against a vicious type of cancer that the couple believes was caused by Elaine's repeated use of Monsanto's Roundup herbicide around a California property the couple owned. Now the roles are reversed as Elaine must help Chris face his own cancer.

Read More Show Less
Butterfly habitats have fallen 77 percent in the last 50 years. Pixabay / Pexels

The last 50 years have been brutal for wildlife. Animals have lost their habitats and seen their numbers plummet. Now a new report from a British conservation group warns that habitat destruction and increased pesticide use has on a trajectory for an "insect apocalypse," which will have dire consequences for humans and all life on Earth, as The Guardian reported.

Read More Show Less
Sponsored
Six of the nineteen wind turbines which were installed on Frodsham Marsh, near the coal-powered Fiddler's Ferry power station, in Helsby, England on Feb. 7, 2017.

Sales of electric cars are surging and the world is generating more and more power from renewable sources, but it is not enough to cut greenhouse gas emissions and to stop the global climate crisis, according to a new report from the International Energy Agency (IEA).

Read More Show Less
"Globally, we're starting to see examples of retailers moving away from plastics and throwaway packaging, but not at the urgency and scale needed to address this crisis." Greenpeace

By Jake Johnson

A Greenpeace report released Tuesday uses a hypothetical "Smart Supermarket" that has done away with environmentally damaging single-use plastics to outline a possible future in which the world's oceans and communities are free of bags, bottles, packaging and other harmful plastic pollutants.

Read More Show Less
Children are forced to wear masks due to the toxic smoke from peat land fires in Indonesia. Aulia Erlangga / CIFOR

By Irene Banos Ruiz

Pediatricians in New Delhi, India, say children's lungs are no longer pink, but black.

Our warming planet is already impacting the health of the world's children and will shape the future of an entire generation if we fail to limit global warming to well below 2 degrees Celsius (35.6°F), the 2019 Lancet Countdown Report on health and climate change shows.

Read More Show Less
Sponsored
Private homes surround a 20 inch gas liquids pipeline which is part of the Mariner East II project on Oct. 5, 2017 in Marchwood, Penn. Robert Nickelsberg / Getty Images

The FBI is looking into how the state of Pennsylvania granted permits for a controversial natural gas pipeline as part of a corruption investigation, the AP reports.

Read More Show Less
Three cows who were washed off their North Carolina island by Hurricane Dorian have been found alive after swimming at least two miles. Carolina Wild Ones / Facebook

Three cows who were washed off their North Carolina island by Hurricane Dorian have been found alive after swimming at least two miles, The New York Times reported Wednesday.

Read More Show Less
The Dakota Access pipeline being built in Iowa. Carl Wycoff / CC BY 2.0

The fight between the Standing Rock Sioux and the owners of the Dakota Access Pipeline is back on, as the tribe opposes a pipeline expansion that it argues would increase the risk of an oil spill.

Read More Show Less