The federally subsidized crop-insurance program, which costs $8 billion a year, “is an unlimited, uncapped entitlement program,” says a coalition of 119 small-farm, organic and land-stewardship groups in farm bill proposals at odds with large-scale agriculture. The National Sustainable Agriculture Coalition proposed an annual limit of $50,000 in premium subsidies for the major crops, such as corn, wheat, soybeans and cotton, and a limit of $80,000 for higher-value specialty crops, such as fruit and vegetables.
“We don’t think the largest farmers should get unlimited subsidies,” said Paul Wolfe, NSAC senior policy specialist. In a 128-page “agenda” for the 2018 farm bill, NSAC called for strong and effective payment limits for subsidies, the traditional backbone of the farm program, and for crop insurance, which became the leading federal support of agriculture under the 2014 farm law. The NSAC document said farmers should be required to practice land stewardship and to preserve wetlands and grasslands if they want access to farm supports.
Farm groups, which tend to bristle at proposals of new limits on farm supports, have made crop insurance their top priority for the farm bill. Senate Agriculture chairman Pat Roberts routinely rules out crop insurance cuts when discussing the upcoming farm bill. The 2014 farm law reconnected the link between stewardship of fragile lands with eligibility for subsidized crop insurance. The USDA pays 62 cents of each $1 in premium for policies, shares with insurers the cost of catastrophic losses and pays part of the cost of delivering insurance to producers.
In its set of policy proposals, the NSAC says crop insurance “must be improved to better serve all of America’s farmers equitably and use taxpayer dollars more efficiently.” To target benefits to small and medium-sized farms, the coalition recommended a cap on premium subsidies, a denial of insurance subsidies to people with more than $900,000 adjusted gross income (AGI), ending federal subsidies of the so-called harvest price option on crop policies, broader availability of coverage for organic growers, and an easier-to-use whole-farm policy for farmers who grow a variety of crops and livestock.
Several of NSAC’s ideas, including elimination of subsidies for the harvest-price option, have been raised by other reformers and by the Obama and Trump administrations. President Trump included it in his budget package last May along with a $40,000-per-year limit on premium subsidies and a denial of subsidized crop insurance to people with more than $500,000 AGI.
Congress has set limits in the past on crop subsidy payments but they are virtually toothless. Large operators can restructure their operations to create new entities that are eligible for additional payments. In other instances, several people register for crop subsidies on a farm because of a loose definition of who is “actively engaged” in operating a farm or providing management advice.
NSAC said its proposed limits “must be paired with a strong ‘actively engaged in farming’ rule that would set a strict limit of one subsidy limit per operation, regardless of farm size or number of farm managers or non-farm investors.”
Large operators get the lion’s share of farm subsidies and crop insurance support because benefits are based on volume of production. Small-farm advocates say unlimited federal subsidies give big farmers the bankroll to out-bid smaller and beginning farmers for land and equipment.
The NSAC agenda also called for restoration of funding to conservation programs that were cut as part of the 2014 farm law; for increased funding for agricultural research, particularly planting breeding; and for increased funding for local and regional food sales.
“We support a single, comprehensive farm bill and stand strongly opposed to any and all attempts to split the bill into two separate measures,” said the NSAC agenda, developed over the past two years by its members. The coalition said it opposed cuts to farm bill funding and in particular cuts to anti-hunger programs that include food stamps.. “On both substantive and political grounds, we believe that a strong argument can be made for an incremental increase in the budget to improve benefits and access to adequate nutrition.”