Report finds privacy-shielded crop insurance subsidies can be massive

Dave DeWitte
Published: May 31 2012 | 1:54 pm - Updated: 31 March 2014 | 7:50 pm in
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A massive analysis of federal crop insurance premium subsidies for 2011 released Thursday underscored the high cost of subsidizing big and highly profitable farming operations.

The Environmental Working Group tracked subsidies that supported 686,273 insurance policies to 486,867 policyholders in 2011. It found single farming operations that received crop insurance premium subsidies as high as $1.9 million.

Findings tended to refute the notion that Midwestern corn and soybean farmers get all the big subsidies. Although 34 percent of the premium subsidies went to corn farmers and 12 percent to soybean farmers, some of the biggest recipients were Florida produce growers, Washington state fruit growers, and a Texas potato grower.

The bottom 80 percent of farming operations in the analysis received much lower subsidies, averaging about $5,060 per recipient.

No Iowa farming operations received premium subsidies of $1 million or more. Four Iowa policy holders received premium subsidies of $500,000 or more. Another 40 received premium subsidies of more than $250,000, while 294 received subsidies of over $100,000 and 858 received more than $65,000.

But in some states, the distribution of subsidies is more lopsided.

Ten percent of the farm businesses that received the greatest amount of insurance subsidies in Texas harvested 63 percent of all the crop insurance subsidies that went into Texas last year, the group noted.

The non-profit advocacy group has gained a reputation for uncovering big agricultural subsidies and naming names of big subsidy recipients. The group couldn't attach names to the more than 26 farming operations receiving $1 million-plus crop insurance subsidies last year, however, because they are shielded by a provision of the Agricultural Risk Protection Act of 2000.

The group's leaders said it was hard to get the data to paint a picture of how the crop insurance premium subsidies are distributed as the Senate Agriculture Committee prepares to debate major changes in the next farm bill.

"We're doing so with a stunning lack of hard-hitting quantitative analysis," said Craig Cox, senior vice president of agriculture and natural resources for the group.

Environmental Working Group expects its findings to back legislative proposals that could be introduced in coming days. Some of the group's policy recommendations include capping the level of crop insurance premium subsidies, requiring that recipients pass a means test to determine if they really need them, and requiring that all crop insurance premium subsidy recipients be publicly identified.

The group argues that crop insurance companies that qualify to participate in the federal program are reaping big profits even in bad years, and that a disproportionate share of the premium subsidies are going to huge businesses.

U.S. Sen. Tom Harkin, D-Iowa, former chairman and senior member of the Senate Agriculture Committee, had a mixed view of the group's findings.

"It is valid and relevant to consider data showing where federal crop insurance premium subsidy benefits are going and the dollar value of those benefits. I am concerned, however, about the value or necessity of releasing individual data seemingly of a private nature for the purpose of facilitating the policy and legislative debate," Harkin said in a statement.

"The fact is that federal crop insurance is important, especially in states like Iowa. Congress must take that into consideration as we draft a new farm bill.

U.S. Sen. Chuck Grassley, R-Iowa, also on the Agriculture Committee, said he's still reviewing the report, but believes the program should be "transparent."

The Environmental Working Group says it supports a more efficient crop insurance system so that more funding is available for federal food assistance and soil conservation programs, especially programs to put more fresh foods and vegetables into school meals.

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