A new report shows that some farmers could receive larger payments under newly implemented crop insurance programs than they would have through the discredited -- and now defunct -- direct payments system.
Direct payments, the widely-criticized federal subsidy program that paid annual checks to highly-profitable farm businesses, were repealed by the 2014 farm bill. Supporters of repeal claimed that taxpayers would save $5 billion a year by eliminating the program. But a new report by economists at the University of Illinois shows that the Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) crop insurance programs that replaced direct payments may lead to even larger payouts.
Their analysis finds that compared to direct payments, three crops could bank insurance payouts for 2014 that are more generous than direct payments would have been:
- Peanut growers will collect $82 more per acre under Price Loss Coverage;
- Corn will cash in $16 more per acre under Agricultural Risk Coverage, and
- Oats will receive $1 more per acre under Agricultural risk Coverage.
Additionally, the Congressional Budget Office is now estimating that the average annual cost of these crop insurance programs will be $1.5 billion more than what was predicted. These results confirm what EWG has repeatedly warned: the 2014 farm bill expanded extravagant subsidies for the largest farm businesses, costing the taxpayers even more every year.
They call this reform?
