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Farm Bill Boosts Net Spending with Crop Insurance Increases

Remember that Farm Bill Congresswoman Kristi Noem always brags about? It was far more than a day late… and now we learn it may run us quite a few dollars short:

KristiforCash…It’s too soon to render final judgment on the nearly 1,000-page bill representing nearly $1 trillion in spending over the next decade, but results so far are calling into question the claims by the bill’s proponents that it would rein in costly agricultural subsidies. As noted by the Washington Post editorial page, a new report from the Food and Agricultural Policy Research Institute at the University of Missouri finds that far from tamping down farm subsidies, the new law is boosting them, by a lot.

The law replaced direct payments to farmers, which were unquestionably in need of reform, with new subsidized crop insurance programs that proponents argued would be more efficient and rationalized, saving taxpayers $23 billion over the long term. But an analysis of the Missouri report by the Environmental Working Group projects that those insurance programs will pay out more than $24 billion between 2014 and 2018, $2.4 billion more than the tab for direct payments in the five years before the law took effect. It also found that the total payout for crop insurance subsidies over the next decade will be $85 billion, a 27 percent increase over the $67 billion paid out over the previous decade for the more limited insurance programs in place then. For 2014 alone, corn growers in much of Ohio, Iowa, Minnesota, and Kansas are to receive payouts of $60 to $200 per acre under the crop insurance program, many multiples of the average $24 per acre they received under the direct payment program, according to a separate report from the University of Illinois [Alec MacGillis, “Farmer’s Market,” Slate, 2015.03.17].

What’s Kristi’s husband do for a living again? Oh yeah, crop insurance.

Democrats, you’re writing all of this down, right? You’re going to find a candidate who can explain all this in 2016, right?

19 Comments

  1. Paul Seamans 2015-03-20 13:03

    While some farmers will profit handsomely from the new farm bill I don’t think that is who the bill was written for. It was written by the insurance companies, the Cargills, the Monsantos, the Kochs, etc.. The farmers are just the means for these mega-corporations to increase their profits.

  2. John Taylor 2015-03-20 15:34

    My understanding is that corn growers will make out fabulously with this Farm Bill because when price points were set, corn was at an all time high. It has fallen precipitously since, hence triggering huge payments to meet the gap. Wheat, sunflower and other growers won’t be making out so good, unfortunately.

  3. Deb Geelsdottir 2015-03-20 19:11

    Crop insurance has been so badly bastardized it’s now misnamed. It ought to be called Profit Guarantee. Generally we have insurance for misfortunes like auto accidents, falls, bad teeth, high blood pressure, house fires, etc. This is the only “insurance” I can think of that guarantees profit for a particular industry.

    This is a government program for Big Ag, as Paul mentioned. It works for very large farms, very large. Ranchers are left out, again.

    Rember, I am a farm kid and I still love farming, so no attacks please.

  4. Sam@ 2015-03-20 19:26

    Kristi shows her true colors. Wants to take health care from the poor, elimate Obama care, among other important programs that benefit many.

    Than to top it she want to line hubbies pockets with cash.

    She is a piece of work and sleeps often with a insurance agent who happens to sell crop insurance.

    Wake up South Dakota and vote her out in 16

  5. Lynn 2015-03-20 19:47

    Sam@

    Kristi also enjoyed taking questionable and expensive trips at taxpayer expense with her travel buddy Rep Aaron Schock. It’s the most profitable job she has ever had. Too bad she never intended to help or represent everyday South Dakotans.

  6. Jana 2015-03-20 20:26

    To grasp either the hypocrisy or shallowness of our only Representative, consider these facts:
    – 1000 page bill? I thought the GOP hated these things.
    – Total lack of disclosure to South Dakotans on how her vote lined her pocket
    – She comes out against healthy school lunches to cater to big corporate donors, who happen to sell unhealthy food, under the guise of local control.
    – She totally bailed on ranchers
    – She is against food for SNAP recipients, but votes to include the bad foods accepted under SNAP because the GOP gets mega-cash from people like Twinkies.
    – She says she’s for the free market…but I’m guessing she thinks that means free money for her and her friends.

  7. Deb Geelsdottir 2015-03-21 00:26

    Jana has written the best comment on this topic:

    “– She says she’s for the free market…but I’m guessing she thinks that means free money for her and her friends.”

    Jana, I bow to your eloquence.

  8. Harvey 2015-03-21 05:38

    Isn’t the major source of the expected payment for corn coming out of the ARC program? This is not crop insurance, it is an FSA (local USDA county office) delivered “benefit” that pays out when yields or prices fall. Blaming local insurance agents or crop insurance adjusters for something they have nothing to do with seems wrong. Cannot see how even Cargill or ADM are directly connected to this ARC payment if it comes to pass.

  9. caheidelberger Post author | 2015-03-21 06:38

    Harvey, if a crop insurance agent is selling the policies, and the policies provide more benefits, isn’t the crop insurance agent going to sell more policies and make more money?

  10. Harvey 2015-03-21 07:43

    ARC is not an insurance product, it is part of the commodity title / not the crop insurance title of the 2014 Farm Bill / this is not a difficult concept to grasp… In 2013, according to USDA website, there were 123,000 crop insurance policies sold (most all likely to family farmers) in South Dakota which totaled $826 million in premium. In 2014, there were 122,000 policies sold that totaled $716 million in premium. These two years generated $586 million in claims in South Dakota on $1.54 billion of premium.

  11. Paul Seamans 2015-03-21 09:49

    One point that seems to be missing from this discussion is that while premiums for the past two years far outweigh losses is the matter of who pays for these premiums. The federal government has been paying for around 70% of the premium and is paying the insurance companies an administration fee of around 10%. This new farm bill is on track to be more costly than the old farm bill while it was sold as a means of saving money.

  12. Harvey 2015-03-21 10:58

    The Non-political congressional budget office (CBO) did the scoring and estimate of the Farm Bill “savings”. This is how it works in DC… They apparently missed badly the early cost of the commodity title as regards ARC. CBO actually over estimated the early years cost of the crop insurance title… The press and pundits such as EWG, that oppose the Farm Bill are entitled to their opinions, they need to accurately reflect the facts and not blame crop insurance for a possible budget miss that is not at all related to crop insurance. Plus, just because the “savings” are not likely to be realized early, does not mean that the out years may be different.

  13. jerry 2015-03-21 11:00

    There you go Paul Seamans, proving Paul Krugman’s article about the flimflam artists that are up to their scrawny necks in fraud against the United States taxpayers while claiming otherwise. I should think that NOem must run sheep on her spread as she sure knows how to pull the wool over voters eyes.

  14. Les 2015-03-21 12:46

    Ranchers raise cows, Owen. Farmers farm grain. Ranchers may raise feed or grain or do both but mostly not do both. The cattle industry is probably the least subsidized industry in our country.

  15. Owen 2015-03-21 12:49

    I stand corrected Les even though I know farmers who have cattle. still doesn’t make it right. Kind of sad when cows are cared for better then humans

  16. mike from iowa 2015-03-21 13:23

    We raised beef and farmed crops on the farm where I still live. I was never called a rancher. This was never called a ranch. We had some cow/bull/calf stuff going on and we also bought feeder cattle. Grain was raised to feed hogs/beef/chickens and for income as well.

  17. Joan Brown 2015-03-21 17:26

    What is the difference between farms and ranches. I do know the difference, one of them is that as a whole a ranch has a lot more land than the basic farm does. However, I know people that live on five acres and call it a ranch and the only animals they have might be a dog or two.

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