EWG makes the case for crop insurance reforms

By Kristin Merony

© Copyright Agri-Pulse Communications, Inc.



WASHINGTON, June 28, 2012- Calling the Senate's reforms to crop insurance a “cynical game of bait and switch,” Environmental Working Group (EWG) Senior Vice President of Agriculture and Natural Resources Craig Cox said that the program “is spending far in excess of the $50 million that would have been spent on direct payments if they were not eliminated.”

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“The cost of the crop insurance program has exploded, from $2 billion a year in 2002 to $9 billion last year,” he said in a briefing on Capitol Hill Thursday.

Cox placed an emphasis on the recently passed Senate Farm Bill, which uses the savings from the elimination of direct payments to create a revenue protection program, Agriculture Risk Coverage (ARC). He said the program is another potentially more expensive entitlement that would guarantee income for the same farm businesses that have benefitted from the “lion's share of traditional farm subsidies.” 

EWG reported that the Congressional Budget Office (CBO) predicts taxpayers will spend $90 billion over the next ten years on crop insurance.

Cox said that crop insurance has morphed from a program designed to compensate producers for weather-caused crop losses to a guarantee of farm income. “We are very concerned about the drift here in farm policy and we are really urging the House to take steps to reform these programs,” he concluded. 

“It is time for direct payments to go, but the Senate missed an opportunity when they took 75 percent of the savings from ending direct payments and plowed it into an expanded crop insurance and revenue guarantee program,” said EWG Vice President of Governmental Affairs Scott Faber. “We are hopeful that the House will not make the same mistake.”   

Faber said EWG expects and hopes to see a debate in the House on whether or not to have payment limits on premium subsidies, means testing, transparency of crop insurance premium subsidies, and conservation compliance. 

“House lawmakers have a real opportunity to increase government transparency and make meaningful reforms that will create a safety net for working family farmers who need the help and will improve America's diets and protect the environment,” Faber said.

EWG's farm subsidy database tracks over $240 billion in farm subsidies from commodities, crop insurance and disaster programs, and $37 billion in conservation payments that have been paid out between 1995 and 2011. 

EWG indicated that 62 percent of farms did not collect subsidy payments but ten percent collected 75 percent of all subsidies amounting to $172.2 billion over 17 years. 

Last year more than 10,000 individual farming operations received federal crop insurance premium subsidies ranging from $100,000 to more than $1 million apiece. With 26 farming operations receiving subsidies of $1 million or more according to EWG analysis.

EWG released their study on federal farm payments made to Congress members and their families, which indicates several members of Congress received substantial subsidies. 

The members that were compensated the most include Rep. Stephen Fincher, R-Tenn., and his wife received $3,528,297, Rep. Kristi Noem, R-S.D., received $480,790, and Rep. Tom Latham, R-Iowa, received $322,446.

For a complete list of members of Congress who received farm subsidy payments, click here.

“These farm payments are not improper or illegal, but they do create a conflict of interest for these members of Congress,” said Cox.

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