Insurance for Corn, Not Kids?
On the same day that the House will vote to end health insurance subsidies for low income Americans, the House Agriculture Committee will vote to increase crop insurance subsidies for the largest and most profitable mega farms – and will cut nutrition assistance programs to pay for it.
Many of the same House Agriculture Committee members who will vote tomorrow (Wednesday) on a proposal to increase crop insurance subsidies voted against the Affordable Care Act in 2009, including Chairman Frank Lucas (R-OK) and Ranking Member Collin Peterson (D-MN). Other members of the House Agriculture Committee who are expected to support unlimited insurance subsidies for corn and cotton farmers tomorrow but voted against health insurance subsidies for low income Americans in 2009 include Reps. Tim Holden (D-PA), Larry Kissell (D-NC), and Mike McIntyre (D-NC), as well as Reps. Bob Goodlatte (R-VA), Tim Johnson (R-IL), Steve King (R-IA), Randy Neugebauer (R-TX), Michael Conaway (R-TX), Jeff Fortenberry (R-NE), Jean Schmidt (R-OH), Glenn Thompson (R-PA), and Thomas J. Rooney (R-FL).
Unlike the health insurance subsidies included in the Affordable Care Act, crop insurance subsidies are not subject to any limits on who can receive subsidies or the amount they can receive. As a result, 26 policyholders each collected more than $1 million in insurance subsidies in 2011 and more than 10,000 each collected more than $100,000, according to an Environmental Working Group analysis. Roughly 30,000 policyholders collected 42 percent of all premium subsidies in 2011.
Rather than place reasonable limits on crop insurance, the Lucas-Peterson proposal that will be considered tomorrow by the House Agriculture Committee actually expands crop insurance subsidies – at a cost of more than $9 billion. To help pay for this expansion and meet deficit reduction targets, the Lucas-Peterson proposal will cut the Supplemental Nutrition Assistance Program, known as SNAP, by $16.1 billion and cut environmental programs by $6.1 billion.
In other words, the bill would give unlimited taxpayer dollars to farmers who are already making record profits and less support to hungry kids who depend on federal assistance for food, and to programs that keep drinking water clean.
Reasonable crop insurance reforms like payment limits and means testing – which already apply to SNAP and to health insurance subsidies – could save more than $20 billion when combined with cuts in subsidies to crop insurance companies. But such reforms were not considered by the committee leaders and face an uphill fight on the floor of the House.
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Corn, Insurance in Context
By Wilson, Brad at Oct 01, 2012 13:42 PM
The larger context, never mentioned by EWG, is that, for 6 decades, farmers of corn and other commodity crops have been targeted by the agribusiness complex for reductions in income and elimination from agriculture. In 1962, for example, the Committee for Economic Development called for running 1/3 of US farmers out of business within 5 years by lowering Price Floors. In the longer run, many more than 1/3 of farmers have been eliminated, as price floors were lowered even much more than recommended in the CED report. Most farmers have gone out of business and most of those remaining have lost livestock to animal factories relying on below cost grain prices. The CED farm bill, ironically, is much better than what EWG recommends, which is a zero price floor proposal.
Price floors and supply management are needed because commodity crop prices don't self correct in deregulated "free" markets. Various subsidy structures have compensated farmers for part of the $4 trillion of reductions over the years. They're the firetrucks at the fires of injustice, but can't fix the problems of zero Price Floors. EWG has claimed that fewer firetrucks will fix things, which is absurd.
Corporate ideologues have looked for ways to benefit (cheap prices) while blaming the victims (farmers' compensatory subsidies). Part of the effort is to make subsidies sound like ordinary good business practice, for example, as "risk management," which is how various insurance subsidies are labeled. To subsidize crop insurance disasters is to slip an income subsidy in under the cover of "risk management," thus hiding the fact that the farm bill has long failed farmers. Another insurance subsidiy, revenue insurance does the same thing, not for crop disasters, but for the usual situation of low prices. It is Congressional insurance against a bad (zero price floor, zero supply management) Congressional farm bill, which is, of course, absurd, but which, also, has usually been needed (ie. under market conditions of the past 60 years, assuming we had farm bills like today over that period).
For a few years we've had higher prices, (not records, but about half of record levels and nearly 60% of previous standards for corn, for example).
The majority of farm subsidy recipients are tiny, less than 4% of the size of a full time family farmer (or less than 8% for those at the bottom 80% mark). EWG treats all of these recipients as full-time family farmers, then contrasts them with the top 10%. In fact, all full-time family farms are in the top 10% and those that are over 50% of full time plus full time make up the majority of the "Big Ag" farmers in the top 10%.
Price Floor programs require much less government spending, in that no subsidies are needed. The mechanism, of price floor loans, pays money into the government. In fact, the programs paid for themselves in the early years and gave government a net gain. This then is a very different solution to getting money for other government programs in the farm bill. Since biggest category of Farm Bill spending is SNAP (food stamps), we should also note a parallel situation. With a living wage instead of a low minimum wage, much less money would be needed in the first place.
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