In a national media teleconference this week, in an apparent move to impact the Farm Bill debate, the Environmental Working Group (EWP) attacked the workings and credibility of specialty crops insurance, which then drew a swift and pointed reply from the crop insurance industry. The news releases from each follow:
FOR IMMEDIATE RELEASE – May 31, 2012
The following statement should be attributed to National Crop Insurance Services, Crop
Insurance and Reinsurance Bureau and American Association of Crop Insurers.
EWG Study A Reckless Attack on Farmers’ Best Risk Management Tool
(OVERLAND PARK, Kan.) — “The Environmental Working Group has an unprecedented track
record of promoting and funding misleading and flawed analysis, as well as mischaracterizing
data to generate news headlines. Its latest attack on farmers’ most important risk management
tool is no different. For example:
• EWG seems to be criticizing government support of crop insurance. Yet, EWG fails to
mention that it is promoting a plan on Capitol Hill to provide farmers with 100 percent
subsidized crop insurance coverage administered by the government instead of efficient
private insurers.
• The same fruit and vegetable growers EWG supposedly champions are likely some of the
largest crop insurance benefit recipients on its list of ‘offenders.’
• EWG fails to account for the fact that these ‘subsidies’ are premium discounts that are
accounting transactions that take place within the USDA. There are no government
subsidy checks to farmers. Unless indemnities are paid to a farmer, there is no outlay on
that famer’s policy. Even when there is a loss, taxpayer cost is minimized by government
underwriting gains on other policies, which is why CBO estimates for crop insurance
have historically been so much higher than actual costs.
“Only telling part of the story is nothing new for EWG when it comes to agriculture. Its
controversial database of direct and counter cyclical payments quietly combines multiple years,
and in many cases multiple farmers, to distort the facts. Ironically, many of the ‘rich and famous’
subsidy recipients EWG has used in the past to make news headlines about farm program
payments receive only conservation subsidy payments that EWG supports.
“Crop insurance is extremely popular with lawmakers from both sides of the aisle, as well as
with farmers, their lenders, and nearly everyone with a stake in rural America. That is because
crop insurance gives producers a fighting chance after disaster strikes or markets collapse. After
recent reductions in farm policies, it is the single most important risk management tool
remaining for U.S. farmers and ranchers.
“One must question the motive of EWG. Is it to leave America’s farmers and ranchers without
the ability to survive and successfully manage agricultural disasters?”
Contact: Laurie Langstraat (913) 685-2767
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Environmental Working Group – FOR IMMEDIATE RELEASE
Contact: Sara Sciammacco; ssciammacco@ewg.org
Government Records Show Crop Insurance Subsidies Are A Boon To Big Farm Interests
Washington, D.C. – A new analysis of over a million government records never before made
public and obtained by the Environmental Working Group through the Freedom of Information
Act has found that in 2011 more than 10,000 individual farming operations have received federal
crop insurance premium subsidies ranging from $100,000 to more than $1 million apiece. Some
26 farming operations received subsidies of $1 million or more last year.
It is the most detailed disclosure of federal crop insurance benefits to date, tracking subsidies
across 686,273 insurance policies issued to 486,867 policyholders last year, when the program’s
costs exceeded a record $11 billion. Yet one crucial detail is missing, deliberately and by an act
of Congress: the names of the beneficiaries.
“The eye-opening analysis shows crop insurance is not only very expensive, but also very, very
generous to large and highly profitable farm businesses,” said Craig Cox, EWG senior vice
president of agriculture and natural resources. “Now the public needs to know who they are.”
Using FOIA requests, EWG collected information from U.S. Department of Agriculture’s Risk
Management Agency about crop insurance policies and premium subsidies for individual
policyholders in each U.S. state and county. The records analyzed by EWG establish that the
holders of subsidized crop insurance policies, unlike other Americans engaged in professional
and commercial enterprises, enjoy extraordinarily costly federal perks in the form of premium
subsidies.
U.S. taxpayers pick up an average of about 62 percent of the crop insurance premiums for farm
businesses. Their share of these premiums has soared from $1.5 billion in 2002 to $7.4 billion in
2011. The subsidies go to large operators with no conservation strings attached to protect water
and soil, no means testing, and no payment limit on how much a farm business can collect.
Among the facts disclosed by the documents:
§? A single farm business in Florida received $1.9 million in subsidies for premiums to
insure crops of tomatoes and peppers in five counties.
§? A Minnesota farm business insuring corn and soybeans in eight counties received $1.7
million in federal crop insurance subsidies.
§? In Texas, the 10 percent of farm businesses that received the greatest amount of insurance
subsidies harvested 63 percent of all the crop insurance subsidies that went into the state
last year.
§? The 10 percent of North Dakota farm businesses that received the greatest amount of
insurance subsidies took in 45 percent of the subsidies going to all farms in the state.
The analysis also shows that while crop insurance benefits, like farm subsidies, are concentrated
in the hands of a small number of large farming operations, premium subsidies are modest for
the overwhelming majority of crop insurance policyholders. Those farm operations would be
unaffected by premium subsidy limits now being debated in Congress, such as the $40,000 limit
analyzed by the Government Accountability Office earlier this year. The bottom 80 percent of
policyholders (389,494 operations), for instance, received subsidies worth just over $5,000 in
2011.
The insurance subsidies are so controversial, and so lucrative to the companies that administer it,
that the industry’s powerful lobbyists prevailed on Congress to bar the U.S. Department of
Agriculture from disclosing identities of individual policyholders who reap the benefits.
“Taxpayers don’t know who is getting our money,” said EWG president Ken Cook. “Why hasn’t
Congress done its job and released the names for everyone to see, instead of serving the interests
of the crop insurance lobby?”
EWG has long advocated for increased transparency and accountability in the burgeoning federal
crop insurance program.
“Senate agriculture committee leaders ought to lift the veil of secrecy before the 2012 farm bill
hits the floor next month,” said Cook. “We must stop giving big payouts that guarantee income
to big agribusiness and pass a fair and equitable farm bill that makes meaningful reforms to crop
insurance, feeds the hungry, and improves the environment and public health,” said Cook.
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