Skip to main content

Federal Crop Insurance encourages destructive farming practices

Farmers Protest Unfair Crop Insurance


By John King

On Monday, March 12, fifty local farmers and protesters picketed the headquarters of NAU Insurance near Anoka, to protest inequities in the current Farm Bill that contribute to the disappearance of family farms and lead to soil erosion and depletion on marginal farm land.  
“Crop insurance is the only Farm Bill program not subject to any limits on the amount of support any one operator can receive. It is uncapped,” said Randy Krzmarzick, who raises corn and soybeans near Sleepy Eye, Minn. “It gives the largest farm business operators access to more financial resources when renting or buying land, putting beginning farmers or small- and mid-sized diversified farms at a competitive disadvantage. We need reform.”  
Crop insurance is a significant part of the Farm Bill amounting to over $9 billion in federal dollars. The 2018 bill is currently being crafted in the U.S. House of Representatives. Crop insurance was started in 1938 to prevent farmers from being wiped out by weather disasters, but according to Krzmarzick, has evolved into an expensive program benefiting the largest farms and insurance companies and damaging the environment in the process. Taxpayer’s dollars support the program by subsidizing up to 60% of the cost of the insurance premiums.
The Anoka demonstratio0n coincided with the release of a Land Stewardship Project https://landstewardshipproject.org study that showed in detail how crop insurance leads to outsized profits for insurance companies such as NAU and for corporate farms.  
“The current crop insurance program benefits the largest farms and insurance companies the most, while penalizing farmers adopting good stewardship practices and making access to land for beginning farmers more difficult. We must protect a strong safety net for farmers, but at the same time we believe two critical reforms — sensible limits on subsidies and connecting the program to meaningful conservation-based farming practices -  are needed,” Ben Anderson, of the Land Stewardship Project (LSP), said. 

According to LSP, the current farm bill makes it possible for large farms to buy marginal farm land, plant a crop and when the crop fails or doesn’t show sufficient profit, and receive insurance payments. Since there are no limits on the amount of insurable acreage that can receive a premium subsidy, the largest farms capable of buying more and more marginal land receive the lion’s share of the payouts. Some Minnesota farms have received more than a million dollars in payouts. LSP proposes limiting premium subsidy to $50,000 to control the inequities in the program.


Thanks to Wikipedia

The LSP report shows how the insurance companies are the true beneficiaries of the crop insurance program. For every dollar in insurance payouts that a farmer receives, the insurance company receives $1.44 amounting to more than $1.3 billion annually pocketed from taxpayer dollars and farmer premiums. 
Seventh District Representative Collin Peterson is the leading Democrat on the House Agricultural Committee that is currently writing the new farm bill. His office, when contacted, opposed writing reforms into the bill saying, “Capping payouts will undermine the insurance program causing acres to leave. This will undermine the ability of smaller producers to access it because of increased premiums.”  
The crop insurance industry has lobbied heavily to prevent reform of the program giving over $700,000 to Minnesota’s congressional delegation while the last Farm Bill was being drafted. 
Tom Nuessmeier, who farms near Le Sueur, points to two government studies that refute Peterson's claim.  

“There’s no real evidence that farmers like me would leave a $50,000 premium subsidy on the table and quit the program because we had to pay full unsubsidized price for acreage beyond that," he said. "The studies show subsidy caps will have minimal impact on premium costs for farmers.” 

Crop Insurance reform has been a central policy priority of Land Stewardship Project’s “Our Farm Bill” campaign.

Comments

Popular posts from this blog

Senator Gazelka: Prepare for End Times

Review by John King “Marketplace Ministers are part of how the Lord will reach the peoples of the earth in these last days.” Author Paul Gazelka wrote this astonishing sentence near the conclusion of his 2003 book, Marketplace Ministers , but it is a good place to start here because it so neatly encapsulates the message of the book which is that business people, by spreading the Gospel, are in a unique position to prepare us, for the end of the world.   Gazelka, an insurance salesman in Baxter, Minnesota, devotes chapters one through four to the story of his religious calling and how he came to adopt the “marketplace” as his personal ministry.  He goes to some length, relying in part on the “Fivefold Path” from Ephesians to convince the reader that the marketplace is a legitimate pulpit to spread the Word.  The remainder of the book, using personal anecdotes and biblical passages, he explains how a marketplace ministry would function and what its usefulness w...

Super-emitting frequent fliers responsible for 50% of aviation CO2

U.S. airlines received a $15 billion subsidy in December’s COVID relief package. The subsidy was for the companies to re-employ thousands of their furloughed employees and keep them on the payroll until at least the end of the first quarter of this year. Congress, and the President, attached no other strings to the huge subsidy, even though airlines social costs, in terms of climate disruption, are huge. In 2018 airlines produced a billion tons of CO2 and benefited from a $100 billion subsidy by not paying for the climate damage they caused, a report published in the November 2020 journal Global Environmental Change, pointed out. The report, summarized in The Guardian on November 17th, drew together data to provide a global picture of the impact of frequent fliers. The conclusion reached by the study’s authors, led by Stefan Gössling at Linnaeus University in Sweden, is that a tiny fraction of the global population benefits from the highly subsidized airline industry while the rest...

Step aside Republicans; Minnesotans want electric vehicles

Late last month Senator Paul Gazelka, the Republican leader of the Senate, told the Minnesota Reformer that the Republican controlled Senate would likely fire the acting Commissioner of the Minnesota Pollution Control Agency, Laura Bishop, if the Agency, at the behest of the Governor, went ahead with the Clean Car Rule. The rule would require automakers to increase the number of electric vehicles they deliver to Minnesota auto dealers. Gazelka told The Reformer that he’d had “a conversation” with Bishop about the rule. Bishop has not been confirmed by the Senate. Gazelka, and his Republican colleagues, claim that electric vehicles are too expensive and that the rule would be a burden to Minnesotans. Gazelka, and the rest of his Party are wrong. They aren’t paying attention to the economics of EV ownership and they are not paying attention to consumer preferences. Way back in September 2019, Consumer Reports reported on a study of Minnesotans they had done in collaboration with the...