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How to Save a Billion Dollars

How to Save a Billion Dollars

Thursday, April 12, 2012

The New York Times’ Ron Nixon has a report out on a just released Government Accountability Office study of federally subsidized crop insurance. An excerpt:

The crop insurance subsidy, according to the G.A.O. report, ballooned to $7.3 billion last year from $951 million in 2000, or about $1.2 billion adjusted for inflation. A Congressional Budget Office study cited in the report estimates that the premium subsidy will cost $39 billion from 2012 to 2016, about $7.8 billion a year.

Unlike other farm programs that have income or payment limits, crop insurance payments have no such restrictions, so farmers can get millions in subsidies regardless of their income. The G.A.O. said a cap last year would have affected about 4 percent of farmers in the program, who accounted for about a third of the premium subsidies and were mostly associated with large farms.

As Congress writes the next farm bill, it appears that its main thrust will be to shift funds from the widely discredited direct payment program for farmers to create new forms of subsidized insurance. As the GAO points out, the same mega farms that have benefited most from direct subsidies will have the most to gain from subsidized insurance. The federal crop insurance program also pays foreign companies billions in tax dollars to administer it.


The Environmental Working Group released a report today called Troubled Waters on industrial agriculture’s pollution of drinking water. Here are some immediate reactions:

-       University of Minnesota water researcher Deb Swackhamer tells the Minneapolis Star Tribune, “We are seeing an increase in public and private wells that are above the health limits for nitrates. We thought this was a 1950s problem.”

-       In a story by Greenwire, a Farm Bureau representative wishes that EWG, instead of reporting on water quality problems, would “celebrate” farmers’ conservation efforts. The Farm Bureau spokesman then rejects the idea of placing conservation requirements on farmers who enjoy taxpayer-funded insurance subsidies.

-       Minnesota Public Radio notes that the “Lincoln-Pipestone water system in southwestern Minnesota added a $2 million nitrate removal system.”

Table Scraps

-       Oxfam America has a new video assailing the failings of the farm bill’s food aid programs.

-       Food and Farm columnist Alan Guebert writes about fraud and abuse in government-mandated agriculture promotion check-off programs.

-       The National Corn Growers Association is pressing food corporations for marketing products as free of high fructose corn syrup.

Tweet of the day:

? @ChrisClaytonDTN Congressmen Chase the Wind. Iowa lawmakers push to extend wind production tax credit.

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