A safety net for farmers

  • Article by: JIM SPENCER , Star Tribune
  • Updated: June 1, 2012 - 9:57 AM

An advocacy group wants limits on government insurance payments.

hide

Under the farm bill, crop insurance will continue to be offered without regard to wealth.

Photo: Teak Philips, St. Louis Post-Dispatch

CameraStar Tribune photo galleries

Cameraview larger

WASHINGTON -- Federal taxpayers paid more than half a billion dollars in crop insurance premiums to protect Minnesota farmers in 2011, according to updated information the Star Tribune obtained from an environmental advocacy group Friday morning. 

One agribusiness growing corn and soybeans in eight Minnesota counties collected almost $1.7 million in publicly paid insurance premiums, part of an overall contribution $526,146,511 to insure crops in the state’s agricultural sector, the Environmental Working Group (EWG) said. Crop insurance protects farmers' income in the result of disasters.

The EWG mined state-by-state data from records collected under the Freedom of Information Act and presented general national spending patterns in a report Thursday. That initial report showed 1,452 crop insurance policyholders receiving at least $65,000 each in publicly funded premiums, a total of more than $94 million. EWG then culled detailed Minnesota statistics for the Star Tribune that revealed the total subsidy was more than $500 million. The law did not require the government to reveal the names of the individual businesses or farmers that got the money.

"We're going to ask the Senate to make the names of crop insurance subsidy recipients public," EWG President Ken Cook said in a conference call with reporters. "There is a tremendous concentration of benefits."

The Senate will vote soon on a five-year farm bill in which taxpayer-backed crop insurance largely replaces direct payments once made to farmers to protect them from poor yields and prices.

The crop insurance industry responded quickly and critically to the EWG numbers. A joint statement by three groups of insurers said the coverage is extremely popular in rural America. "Crop insurance gives farmers a fighting chance after disaster strikes or markets collapse," said the statement from the National Crop Insurance Services, Crop Insurance and Reinsurance Bureau and the American Association of Crop Insurers.

Rep. Collin Peterson, D-Minn., whose district is largely agricultural, said the program is working as it should. "Crop insurance is a way to avoid bailouts," Peterson said. "Farmers don't control weather or prices. To maintain food production in this country we have to have this."

EWG has been sharply critical of the direct payments, which largely go to farmers without strings attached. Now, the group has targeted crop insurance with an eye toward setting limits.

Under the proposed farm bill, crop insurance subsidies will continue to be offered without regard to wealth. In 2011, that meant 26 businesses received more than $1 million each in taxpayer-subsidized insurance premiums, the EWG said.

Among the 26 were three that did all or some of their growing in Minnesota. The state also had 1,452 policyholders who collected more than $65,000 each in taxpayer-funded premiums, the EWG said.

EWG officials expressed concern that spending on crop insurance would take money from food stamp and conservation programs.

"The food movement needs to speak up, and so does the conservation community, to be frank," Cook said.

Chances of getting far-reaching amendments into the farm bill at this point are slim, experts say.

The Senate Agriculture Committee, which includes Minnesota Democrat Amy Klobuchar, approved the farm bill with an expansion of crop insurance that incorporated most of the money that once went to direct payments.

Supports and expansion of crop insurance in the new farm bill will cost $128 billion over the next 10 years, the EWG said.

Klobuchar reacted to the EWG report with a statement affirming her support for crop insurance.

"Minnesota farmers need to know that they will not lose everything in the event of a market failure or natural disaster like the heat waves or floods we experienced last summer," Klobuchar said. "And I will continue to work to insure we have a strong safety net for our local producers."

The Environmental Working Group had pushed to cap crop insurance in the new bill and to tie eligibility to income thresholds and participation in land conservation programs.

Peterson, the ranking Democrat on the House Agriculture Committee, doesn't see that happening.

"We need to look at crop insurance subsidies," he said. "We ramped up the levels of subsidy to get [farmers] to use [crop insurance]. But we don't have the information we need to make changes."

Changing too soon could "muck up" a system that keeps food affordable, Peterson said. "This is the safety net for production agriculture."

Jim Spencer • 202-408-2752

  • related content

  • A cornfield in Illinois. Both Rep. Collin Peterson and Sen. Amy Klobuchar support crop insurance.

  • CROP INSURANCE

    • Federal taxpayers paid at least $94 million in crop insurance premiums to protect Minnesota farmers in 2011.

    • The Senate will vote soon on a five-year farm bill in which taxpayer-backed crop insurance largely replaces direct payments once made to farmers to protect them from poor yields and prices.

  • get related content delivered to your inbox

  • manage my email subscriptions

ADVERTISEMENT

Connect with twitterConnect with facebookConnect with Google+Connect with PinterestConnect with PinterestConnect with RssfeedConnect with email newsletters

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

 
Close