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

Crop Insurance Changes Needed in 2018 Farm Bill

MINNEAPOLIS, 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. That’s the conclusion of “Crop Insurance: A Torn Safety Net,” a special report released by the Land Stewardship Project (LSP) today.

Federal crop insurance was started in 1938 as a way to prevent U.S. farmers from being wiped out by weather disasters. Budget-wise, crop insurance is now the biggest agricultural program in the federal Farm Bill.

“Broken and mis-directed federal farm policy, like the crop insurance program, is contributing to the loss of family farms and the emptying of rural communities. This is not an inevitable outcome but a choice made by Congress, influenced heavily by major multinational insurance corporations and their allies,” concluded the report, which is based on a combination of research of public records and personal testimony from farmers.

The report found:

• Federal crop insurance is the only Farm Bill subsidy program without per-farm subsidy limits.

• Federal crop insurance discourages farming pratices that build soil health, increase crop disversificiation and prevent eriosion and nutrient run-off.

• Since 2013, national median farm income has been negative—farmers are losing money. However, during the past four years crop insurance companies have seen their profits skyrocket, thanks in part to $14.8 billion in public funds given to them over the past decade to administer the insurance program.

• The crop insurance industry has worked hard to protect its profits. For example, the insurance industry gave $711,302 to members of the Minnesota Congressional delegation while the last Farm Bill was being drafted.

The release of the LSP report comes at a time when Congressional agriculture leaders, including five members of Minnesota’s Congressional delegation, are beginning to draft the 2018 version of the Farm Bill. This provides a prime opportunity to reform crop insurance by placing limits on premium subsidies and ending the exorbitant profitmaking insurance corporations enjoy as a result of the publicly funded program.

NAU Country Insurance, based in Ramsey, Minn., 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,” see www.landstewardshipproject.org/organizingforchange/cropinsurance.

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