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The EWG Farm Safety Net

Wednesday, April 18, 2012

The Environmental Working Group released a report (PDF) today (April 18) that shows that an EWG proposal to reform the costly federal crop insurance program through the 2012 farm bill could save taxpayers up to $18.5 billion over 10 years while delivering a reliable safety net to American farmers.

EWG commissioned Dr. Bruce Babcock, an economics professor at Iowa State University, to analyze the impact of offering farmers a free insurance policy that would cover 70 percent of average crop yield at 100 percent of the market price for the lost crop.

Under the current system, farmers only pay a small portion of the policy premiums, and the private insurers that sell the policies pay less than half of the damage claims from crop revenue losses. Taxpayers pick up the rest, along with exorbitant administrative costs and agents’ commissions. The result is that one taxpayer dollar goes to insurance companies and agents for every dollar sent to farmers to pay claims.

So it’s hardly a surprise that the cost to taxpayers of the current crop insurance system has soared from $2.4 billion in 2001 to nearly $9 billion in 2011, driven by high commodity prices and the generous premium subsidies that lead farmers to buy the most expensive insurance available.

Go here to read more.


Bloomberg News reports that “House Republicans are calling for $34 billion in cuts over the next decade to the food-stamp program, setting up a fresh election-year battle over the U.S. budget deficit.”

The House Ag committee accepted those nutrition cuts today despite new information that the Supplemental Nutrition Assistance Program (foods stamps) held down the poverty rate during the recent recession. The Center for American Progress also released an analysis of the gross inequity of cutting nutrition assistance to the neediest Americans while protecting tax cuts for the rich.

Lawmakers proposed no cuts to the billions in farm subsidies that get sent out despite year after year of record income for farmers.


Table Scraps

-          The Detroit Free Press reports that  a Michigan woman who continued to collect food stamps after winning a $1 million lottery jackpot was charged on two felony counts of welfare fraud. Michigan’s attorney general commented said: “It’s simply common sense that million dollar lottery winners forfeit their right to public assistance.” Not long ago, EWG research discovered that several Texas farmers who shared a $46 million lottery jackpot continued to receive hundreds of thousands of taxpayer dollars in farm subsidies for years afterward.

-          Civil Eats covers the story of a mother who won the Goldman Environmental Prize for taking on Monsanto after her newborn was exposed to pesticides in the womb and subsequently died of kidney failure.

Tweet of the day:

@ChrisClaytonDTN House Ag Chair Frank Lucas says he will “consume a lot of Maalox before this is over with” when talking about budget cuts and farm bill.

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