Fighting crop insurance cronyism
“I don’t have super high hopes it’ll go anywhere,” says Lori Sanders, outreach director and senior fellow for The R Street Institute.
She’s talking about the Harvest Price Subsidy Prohibition Act, a bill introduced February 12 that targets the harvest price option (HPO) crop insurance policy—known as “the Cadillac coverage option of federal crop insurance.”
…The American Association of Crop Insurers, the Crop Insurance and Reinsurance Bureau, and National Crop Insurance Services called the bill “just another example of agriculture opponents trying to erode the risk management tools on which farmers depend,” according to AgWeek. But in a press release, R Street argued that “This product goes above and beyond the definition of a safety net. It is the crop insurance equivalent of your auto insurer surprising you with a new Cadillac Escalade after you’ve totaled your Toyota Corolla.”
…The farm bill’s crop insurance measures inordinately help large industrial farms stay alive, giving them an unfair advantage over small to midsize farmers, who cannot afford the same coverage. As Sanders wrote in a piece for TAC last year, “The federal government pays, on average, 63 percent of producers’ crop insurance premiums, regardless of whether it is a small family farm or a large, multi-million dollar business. Twenty-six farms receive more than $1 million in premium support, while 80 percent of farms receive $5,000 or less.”
…The Congressional Budget Office estimates that the bill bill could save more than $18 billion over the next decade, “with no effect on the premium subsidies farmers receive for standard crop insurance policies,” says R Street.
So why doesn’t Sanders think it’ll get past committee?
“It’s very arcane, few know about it outside the Farm Bureau,” she told me—and the Farm Bureau has developed a reputation for supporting agribusiness, to the detriment of smaller family farmers. The Farm Bureau is just one piece of the Big Ag lobbying behemoth that dominates Washington: “In addition to the American Farm Bureau Federation’s twenty-two lobbyists, no fewer than 20 of the state Farm Bureaus, including Missouri, have registered lobbyists in Washington, leading the field of agribusiness lobbyists,” Ian T. Shearn wrote for The Nation in 2012. “Over the past decade, the nation’s ten largest agribusiness interests gave $35 million to Congressional candidates—led by the Farm Bureau, which gave $16 million, or 45 percent of the total.”
…Sanders believes a lot of the Farm Bill’s cronyism is indirectly supported by Americans’ ignorance. People assume that support for the farm bill equals support for the local, family-run operations they consider the backbone of American agriculture. “Mainstream America just doesn’t know,” she said.
However, Sanders does hope that this bill—as well as the AFFIRM Act, which will be reintroduced to Congress in two weeks—will help raise awareness about the cronyism the farm bill supports, and what reforms need to be made. “We need to keep the drumbeat going.”