New Report Calls for Reforms to Nation’s Biggest Ag Safety Net

RAMSEY, Minn. — The nation’s biggest farm “safety net” has evolved into a program that harms family farms, the land and rural communities, while bolstering profits for major insurance companies, including one headquartered in Minnesota, said farmers and Supplemental Nutrition Assistance Program (SNAP) recipients during a press conference held today in front of the headquarters of NAU Country Insurance in Ramsey. The group had gathered to announce the findings of a Land Stewardship Project special report, “Crop Insurance: A Torn Safety Net—Why the Farm Bill’s Biggest Program is a Boon to Corporations and a Bust for Family Farmers and the Land.” NAU, like many insurance companies, has made billions of dollars in profits off federal crop insurance, even as rural economies suffer.

While federally subsidized crop insurance is an important safety net for farmers, the report used public documents and interviews with farmers to show that the program is broken and that it needs reforms such as placing caps on how much of a crop insurance premium subsidy each farm can receive from the government.

“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 most aggressive 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 limits.”

Federal crop insurance was started in 1938 as a way to prevent U.S. farmers from being wiped out by weather disasters. However, as a result of lobbying on the part of the insurance industry and commodity groups, in recent years it has become a program that in fact puts family farmers at a competitive disadvantage while incentivizing agricultural practices that erode the soil and cause water pollution, according to the LSP report.

Budget-wise, crop insurance is now the biggest agricultural program in the federal Farm Bill. Needed reforms would help free up public funds for other Farm Bill programs like conservation and nutrition assistance, concludes the LSP report.

“They write laws to benefit corporations, even though the farmers are the ones who make the food,” said Deborah Howze, who lives in Minneapolis and participates in SNAP. “And they’re slashing SNAP benefits for poor people, things people rely on. I support farmers. We want to feed our families good too, not just soda pop and potato chips.”

NAU Country Insurance is one of the 15 authorized insurance companies that can sell federally subsidized crop insurance. NAU, and its parent company, Australia-based QBE, have been vocal advocates for resisting reform of crop insurance. Minnesota politicians have been top recipients of QBE campaign donations.

“Do politicians work for family farmers and people, or do they work for agribusiness and insurance companies?” asked Franklin, Minn., dairy farmer James Kanne.

For a copy of “Crop Insurance: A Torn Safety Net—Why the Farm Bill’s Biggest Program is a Boon to Corporations and a Bust for Family Farmers and the Land,” click here.

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