Uncapped Subsidies Raise Family Farm and Conservation Concerns

Federal farm spending is undergoing a major shift from traditional farm programs to subsidized crop insurance premiums, with implications for family size farms and conservation.
Unlike traditional farm programs, recipients of crop insurance subsidies need not practice soil conservation.  Furthermore, crop insurance subsidies to the nation’s largest farms are unlimited.  If one corporation farmed your entire county, the government would pay over 60% of its premium on every acre.

Federal spending on subsidized premiums has quadrupled over the last decade.  The total cost of crop insurance to the federal government last year ($8.7 billion) was nearly twice the cost of direct payments to farmers.   The Senate version of the new farm bill eliminates direct payments and in part replaces them with subsidies for enhanced insurance coverage.

Federal crop insurance is a valuable tool for farmers.  But its emergence as the primary farm program effectively eliminates both payment caps and conservation requirements.  A direct attempt to eliminate them in traditional farm programs would have prompted a public outcry.   But the emergence of crop insurance as the primary farm program has led to the same outcome, while meeting with little protest.

There is another implication of the shift to reliance on subsidized crop insurance premiums.  It costs more to insure $6 dollar corn than $3 corn.  By subsidizing 60% of more expensive premiums, federal crop insurance actually spends more in years of lesser need.

That is one more reason to cap the annual crop insurance premium subsidies any one operation can collect.

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