WASHINGTON – Through federal farm programs, American taxpayers are routinely paying thousands of wealthy mega-farms twice for the same "loss," according to a new EWG report.
Farm businesses regularly get payments from their government-subsidized crop insurance policies, and then receive separate payments from one of two Department of Agriculture subsidy programs created in the 2014 Farm Bill.
Farmers who receive payments through one of the new subsidy programs – the Agricultural Risk Coverage program or Price Loss Coverage program – routinely take indemnities from their revenue insurance policies.
“ARC, PLC and crop insurance each define 'losses' in different ways, but in the end they pay out for the same reason: failure to meet expectations for crop yield or revenues," said Anne Weir Schechinger, EWG's senior economics analyst and co-author of the report.
EWG’s analysis found:
- In 2015, farmers in more than 2,300 counties received ARC or PLC payments for losses incurred in 2014. Crop insurance indemnity payments were also made in 77 percent of those counties.
- In 2016, farmers in more than 2,800 counties received ARC or PLC payments for losses incurred in 2015. Crop insurance indemnity payments were also made in 71 percent of those counties.
Farmers in six states – Iowa, Minnesota, Nebraska, Illinois, Kansas and North Dakota – received more than half of PLC, ARC and crop insurance indemnity payments.
Farm subsidies overwhelmingly flow to the largest farms, according to EWG’s updated Farm Subsidy Database.
The top 10 percent of subsidy recipients collected 77 percent of farm subsidies like ARC and PLC between 1995 and 2016, even though annual farm household income for large commercial farms tops $1.1 million.
Taxpayers also pay more than 60 percent of the cost of crop insurance premiums, which are not subject to means tests or payment limits. As a result, some farms have received more than $1 million in annual crop insurance premium support.
“In most businesses, when you don't make as much money as you had hoped, you don't get compensated by the government at all," said Weir Schechinger. “Who gets paid twice? This is the sort of ‘solution’ that can only come from Washington, and it's costing taxpayers billions.”