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Cut Crop Insurance, Not Conservation and Nutrition

Tuesday, May 14, 2013


This ought to be simple.

While farm income is at record levels, 47 million Americans are struggling with hunger and millions of acres of wetland and prairie are being lost forever.

So, naturally, the farm bill proposals being debated this week would cut subsidies for the largest and most successful farms and provide more assistance for the hungry and the environment.


Some things are not so simple.

Sadly, the farm bill drafts being marked up today and tomorrow by the House and Senate Agriculture Committees actually do the exact opposite.

Both the House and Senate bills would increase crop insurance subsidies – by $9 billion and $4 billion, respectively – and cut nutrition and conservation spending: by $25 billion in the House version and by $8 billion in the Senate’s.

The House bill cuts nutrition spending alone by more than $20 billion, which would push about 2 million poor Americans out of feeding assistance programs.

A better course would be to place reasonable limits on crop insurance, as Sens. Gillibrand (D-N.Y.), Coburn (R-Okla.), Durbin (D-Ill.), Shaheen (D-N.H.), Toomey (R-Pa.), Begich (D-Alaska), and Flake (R-Ariz.) have proposed.

In combination, their proposals to cap the amount of premium support big farm operations can receive would save more than enough money to avoid cuts in nutrition and conservation programs and at the same time meet deficit reduction targets.

Simply reducing subsidies to crop insurance companies – as Sen. Gillibrand has proposed – would save more than $5 billion over 10 years. In combination, reducing subsidies to the companies and setting a payment limit on premium support to the largest and most successful farmers – as Sens. Shaheen and Toomey have proposed – would eliminate the need for cuts to conservation and nutrition altogether.

Avoiding these needless cuts to these vital programs is reason enough to support crop insurance reforms.

But there are even better reasons.

First, current crop insurance policies have created a playing field that is badly tilted in favor of the largest and most successful farms. Under current law, there is no limit on who can receive premium support or the amount they can receive. As a result, 26 policyholders received more than $1 million apiece in crop insurance premium support in 2011, and more than 10,000 policyholders received more than $100,000 each.

By contrast, the bottom 80 percent of farm businesses received only about $5,000 apiece to help them purchase insurance policies.

Second, by virtually eliminating risk, crop insurance subsidies are encouraging farmers to plow up wetlands and prairies, a trend that is increasing water pollution, releasing more carbon into the atmosphere and destroying wildlife habitat. The Senate bill would require farmers to adopt basic environmental protections, but it also offers new subsidies to buy even higher levels of insurance coverage, which increases the incentives to farm marginal land, further degrading the environment.


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