Monday, June 04, 2012

Farm Bill's shift to crop insurance would still help big farmers most; conservation reserve would be cut

The Congressional Budget Office confirmed last week that the Senate version of the Farm Bill will save an estimated $23.6 billion over the next 10 years. About three-quarters of that would come from reductions in subsidies for major commodity crops, David Rogers of Politco writes. This represents a huge shift of resources toward new, government-backed crop insurance options that would give farmers more help to pay deductibles. This should save about $17 billion from what are generally seen as traditional support programs, including direct payments made without regard to what is happening out in the fields. (Associated Press photo)

As the Senate takes up the bill this week, "At issue are government-backed premium discounts designed to make the insurance more affordable to farmers," Rogers writes. "While not truly cash subsidies, the costs have soared in recent years and fit neatly into the environmental narrative that Washington is too quick to help large-scale farm production at the expense of investments in conservation and the land itself." Rogers' story is a good account of a complicated process. You can read it here.

The Environmental Working Group released new crop-insurance cost data gleaned from Freedom of Information Act requests filed with the federal Risk Management Agency showing that, in 26 cases, policyholders received an annual discount of $1 million or more in 2011. In 10,152 cases, it was $100,000 or more, while the vast majority of farmers received far smaller discounts, averaging closer to $5,000. “The eye-opening analysis shows crop insurance is not only very expensive,” said Craig Cox, EWG’s senior vice president of agriculture and natural resources, “but also very, very generous to large and highly profitable farm businesses.”

"Because farm subsidies, old and new, have been tied to production, those cultivating the largest acreage get the biggest payouts, Robert B. Semple Jr. wrote in The New York Times yesterday. He noted the bill's proposed cuts in the Conservation Reserve program, " which rewards farmers for converting erodible farmland to grass and other vegetation. However flawed, the old subsidy programs required farmers to act as responsible stewards of the land — promising, among other things, not to drain wetlands. The crop insurance subsidies impose no such obligations."

Semple writes that the bill repeats the vows made and broken with every Farm Bill, to "end unnecessary subsidies to big farmers, enhance the environment and actually do something to help small farmers and small towns. But what it usually does is find ways of disguising the old inequities, sending taxpayers dollars to wealthy farmers, accelerating the expansion of industrial farming, inflating land prices and further depopulating rural America," and the new one "promises more of the same — excessively generous handouts, combined with a serious erosion of environmental protections." (Read more)

No comments: