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New Analysis Finds Bloated Crop Insurance Subsidies

(202) 667-6982
For Immediate Release: 
Wednesday, May 22, 2013

WASHINGTON -- EWG’s 2013 Farm Subsidy Database, launched today, documents that free-spending federal crop insurance subsidies are badly in need of reform.

The new data detail $292.5 billion in subsidies paid from 1995 through 2012, including $53.6 billion in crop insurance subsidies.

View the data by going here: http://farm.ewg.org/

View the top 2012 farm subsidy recipients in America here: http://farm.ewg.org/top_recips.php?fips=00000&progcode=totalfarm&yr=2012&regionname=theUnitedStates

“Crop insurance costs have reached an all-time high and overwhelmingly flow to the largest and most successful farm businesses,” said Scott Faber, Environmental Working Group’s vice-president for government affairs. “While the top 1 percent of recipients haul in more than $220,000 in support per year the bottom 80 percent get only about $5,000. Some very large farm businesses receive more than $1 million in insurance subsidies.”

EWG’s Farm Subsidy Database has been searched 436 million times since 2004 and is widely credited with transforming the national debate over federal support for agriculture. In the last few years, crop insurance subsidies, which are more costly and less transparent than the now-discredited direct payments system, have quickly emerged as the main support for farm income. 

EWG collects and publishes U.S. Department of Agriculture data on those who receive farm payments, but Congress has prohibited USDA from disclosing which farm businesses receive crop insurance premium subsidies. As a result, taxpayers and policymakers are in the dark. In addition to withholding names of beneficiaries, this year, for the first time, USDA’s Risk Management Agency has refused to provide information about specific policies, including amounts of subsidies and indemnities paid.  

Last year, USDA’s release of that information enabled EWG analysts to determine that some policyholders received more than $1 million apiece in premium support annually and that more than 10,000 received more than $100,000 apiece.

“Under current law, taxpayers pay two-thirds of crop insurance premiums and most claims filed when disaster strikes,” Faber said, ”This policy has made crop insurance the most expensive – and least equitable – component of the farm safety net, costing taxpayers twice as much as direct payments and other subsidies.”

The data reveal that the lion’s share of crop insurance support goes to beneficiaries in a handful of states. Farmers in some Midwestern and Southern states have received more than $5 billion in crop insurance subsidies since 1995, while those in most other states have taken in less than $1 billion.

Common-sense reforms -- including payment limits, means testing and greater disclosure requirements -- would strengthen the crop insurance program,  

Eight senators – Sen. Jeanne Shaheen (D-N.H.), Sen. Pat Toomey (R-Penn.), Sen. Marc Begich (D-Ark.), Sen. Jeff Flake (R-Ariz.), Sen. Tom Coburn (R-Okla.), Sen. Dick Durbin (D-Ill.), Sen. John McCain (R-Ariz.), and Sen. Dianne Feinstein (D-Calif.) will offer crop insurance reform amendments to the 2013 Farm Bill this week.

“These reforms would strengthen, not weaken, the crop insurance program by making costly subsidies more fiscally responsible and transparent,” Faber said.  “There has never been a better time to ask the largest farm businesses to share more of the cost of risk management.  Net farm income, farm equity and farm household income are all at or near record highs.”  

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