Unlimited crop insurance subsidies cost the taxpayer billions of dollars a year and overwhelmingly flow to the largest and most successful farm businesses. Unlike other farm subsidies, crop insurance subsidies are not subject to means testing or payment limits. While some farms annually collect more than $1 million in crop insurance premium support, the bottom 80% of policyholders annually collect about $5,000.
The price tag for subsidizing cottonseed turns out to be a whopping $10 billion over the next 10 years. The cotton industry wants to take that big chunk of change out of the pockets of taxpayers who are already hard-pressed.
In 2014, Congress eliminated direct payments to farmers, replacing them with two new subsidy programs known as Agricultural Risk Coverage (ARC County) and Price Loss Coverage (PLC). The Congressional Budget Office declared that that this switch would save taxpayers billions of dollars over the life of the Farm Bill. It didn't.
The corn ethanol mandate requires refiners to blend more and more ethanol into gasoline. But there is already a “natural” marketplace demand for ethanol. If there were no mandate, gasoline refiners would still blend corn ethanol to boost octane and as an oxygenate to lower tailpipe pollutants.
Huge multinational corporations are selling off their crop insurance businesses. The reason, according to the industry, is that business is just too bad, despite billions in federal subsidies. What they don’t point out is other multinationals are snapping up those same companies.
Greed, at least when it comes to the cotton industry and its lobbyists, isn’t taking a break this holiday season. Cotton farmers cut a sweet deal in the 2014 farm bill. In return for their very own income support program – the Stacked Income Protection Plan, or STAX – the growers agreed they wouldn’t dip into two other federal assistance programs ginned up to stabilize the incomes of growers of corn, wheat and other favored crops.
The proposed $3 billion cut in crop insurance subsidies in the recent federal budget deal would not “kill the crop insurance program,” contrary to claims by the crop insurance industry and its allies in Congress. It would merely cut the fat from the industry’s cost of doing business, according to a new analysis commissioned by EWG.Read More
The cost to taxpayers of providing crop insurance to farmers has more than tripled since 2001, rising from an average of about $3 billion a year in 2001-2003 to more than $10 billion a year in 2012-2014. The increase is largely the result of sharp jumps in the cost of subsidizing both farmers’ premiums and the companies that sell crop insurance.Read More
The head of the crop insurance industry's trade group is objecting to an EWG analysis that found that crop insurance companies could easily absorb cuts to their taxpayer-guaranteed rate of return. But a study commissioned by his own organization shows just how well crop insurance companies are doing.
A back-room deal to restore crop insurance companies' sky-high guaranteed rate of return won't stand if Senate Minority Leader Harry Reid (D-Nev.) has anything to say about it.
The decision by Congress to cut the government-guaranteed profits of crop insurance giants will not “cripple” the industry, as some crop insurance companies claim. Contrary to industry complaints, the companies that benefit from the heavily subsidized federal crop insurance program make huge profits, pay their top executives millions of dollars annually and can easily afford to pull in their belts, according to a new analysis and interactive map by EWG.Read More
The congressional budget deal signed by President Obama in early November includes a cost-saving measure that trims the profits taxpayers guarantee the crop insurance industry. The guaranteed rate of return of these companies would drop from 14.5 percent to 8.9 percent, saving $3 billion over the next 10 years.Read More
Legislation introduced in Congress today would ease the burden placed on taxpayers and the environment by the bloated federal crop insurance program, according to the Environmental Working Group.Read More
Crop insurance has come under attack for its increasing cost, environmental harm and secrecy. The farm lobby, the crop insurance industry and their political patrons push back by claiming that despite its flaws, at least the federal crop insurance program is better than the ad hoc disaster programs it replaced.
EWG’s new analysis found that the federal crop insurance program is much more costly to taxpayers and more harmful to the environment than the disaster payment program it has largely replaced. EWG analyzed crop insurance and ad hoc disaster payment data and reviewed scientific and economic studies of the two approaches to farm assistance, and found:Read More
When you buy home or car insurance, you expect to collect only when there’s a disaster – a tornado, a hailstorm or a collision. If there was a policy that paid out year after year, you only had to pay less than half of the premium and you’d actually make money from buying it, you’d jump at it – but the insurer would be foolish.Read More
Here is a joint statement from John Boyd, president of the National Black Farmers Association, and Scott Faber, vice president of government affairs of EWG, on a critical crop insurance reform included in the budget deal the House will consider today.Read More
Rep. Kevin Cramer (R-ND) will oppose a budget deal because $3 billion in savings come at the expense of giant crop insurance companies. In his statement, Rep. Cramer called a proposal to limit windfall profits for insurance companies like Wells Fargo “Obamacare” of crop insurance.
The savings to taxpayers from the so-called reform of federal farm subsidies are turning out to be mythical – while cuts to programs to help farmers protect the environment are all too real.
The House Appropriations Committee today passed an agriculture appropriations bill that destroys critical environmental protections while leaving the lavish and wasteful federal crop insurance program unchecked, costing taxpayers billions of dollars, according to EWG.Read More