Money Managers and Banks Swoon Over Subsidized Crop Insurance
Gregory Meyer at the Financial Times has an explosive story (subscription required) on how big time money managers can’t get enough of the federal government’s revenue guarantees with crop insurance subsidies. Some excerpts:
Institutional money managers have emerged as unlikely beneficiaries of a subsidised safety net for US farmers set for expansion by Washington.
“The fact of the matter is that you can insure your crop at a level which means your farmer isn’t going bankrupt. I’ve got a government-backed counterparty,” said Hunt Stookey, head of farmland investment at AEW, which manages $47.5bn in real estate. ”I can’t have that bad a year.”
“I don’t know of any other business where you can insure 90 per cent of your P and L,” said an adviser to large farmland investors.
The Financial Times’ story runs on the heels of pleas to Congress from the Independent Community Bankers of America not to cut crop insurance subsidies.
- The LA Times’ opinion page asks, “Does the farm bill care more about big business than people?”
- Iowa conservationist Tim Ackarman writes “Producers who find federal regulations unnecessarily burdensome are free to take their chances on the open market without government assistance."
- EWG’s Thomas McAndrew reports on the efforts of Senators Jeanne Shaheen , D-N.H. and Pat Toomey, R-Pa. to reform wasteful crop insurance subsidies.
- Newsday columnist Daniel Akst says “Like its predecessors over the years, this new farm bill offers juicy giveaways to agribusiness under the guise of helping the couple with the pitchfork in the famous Grant Wood painting.”
- The Poughkeepsie Journal editorialized “For far too long, the overwhelming number of federal subsidies have gone to megafarms that produce corn, wheat and cotton, typically grown in the South and Midwest.”
- Roll Call ran a cartoon on subsidized crop insurance called “Blank Check.”
- The Eugene Oregon Register Guard editorial board warns “At a time when high crop prices have prompted farmers to expand into millions of acres once deemed unsuitable for agriculture, the proposed insurance expansion could end up costing the government billions of dollars if those marginal lands fail to produce sufficient yields or prices fall.”
- The Hill reports, “Sen. Conrad's farm bill compromise draws fire.”
- In Oklahoma, young and small farmers struggle for the same measure of support as mega farms.
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