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Seeking Reasonable Limits on Crop Insurance Subsidies

Friday, June 15, 2012

By EWG public affairs intern Thomas McAndrew

“Large farms simply don’t need unlimited government support to pay for crop insurance. Capping these premium supports will cut the deficit, while ensuring farms continue to have access to insurance. It’s just common sense.”

That’s what Sen. Jeanne Shaheen , D-N.H., said yesterday at a press conference to share the details of a farm bill subsidy reform amendment she is co-sponsoring with Sen. Pat Toomey, R-Pa.

Click here to watch the full press conference.

The Shaheen-Toomey amendment would place a cap of $40,000 per farm on crop insurance premium subsidies. Currently, there are no limits on who can receive premium subsidies or how much they can receive. This has created an unfair playing field for our nation’s family farmers.

Since there is no cap on insurance subsidies, 26 policyholders each received more than $1 million in premium subsidies in 2011.  More than 10,000 policyholders each received $100,000 or more in premium subsidies, according to an Environmental Working Group analysis. The largest 20 percent of farmers receive, on average, about $50,000 a year, and the bottom 80 percent receive, on average, about $5,000 a year.

The Shaheen-Toomey amendment and other practical crop insurance reforms will simply apply the same limits that have always applied to other farm subsidy programs.

With crop insurance taking over as the primary way farmers are subsidized--at a cost of $90 billion--the Senate should ensure that this program is used in the most effective way to help all family farmers and protect the environment.

Right now, the largest producers are guaranteed a profit on every acre they plant whether or not it will actually yield a return.

“U.S. crop insurance subsidies are making it possible, even desirable, to plow up marginal lands like wetlands and grasslands that would not be farmed if farmers were simply responding to market forces,” said Scott Faber, vice president of federal affairs at EWG. “And, it’s not just taxpayers who are paying the price. The combination of unlimited subsidies and high commodity prices has contributed to the loss of millions of acres of wetlands of grasslands in recent years, threatening jobs that depend on fish and wildlife and increasing drinking water treatment costs in our rural communities.”

EWG recently released maps using U.S. Department of Agriculture’s National Agricultural Statistics Service cropland data to highlight how expanding crop production is driving the loss of grasslands and wetlands.

Faber said the Shaheen-Toomey amendment was not only the most important bipartisan amendment to help family farmers and the environment; it’s also the most important bipartisan amendment to reduce the deficit.

“Washington needs to work to bring our deficit under control, and our amendment offers us the opportunity to save more than $5 billion and make common-sense reforms to a bloated federal program,” said Sen. Toomey.