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RELEASE: New NSAC Report Projects Billions Saved Via Crop Insurance Subsidy Caps

July 19, 2022


Contact: Laura Zaks

National Sustainable Agriculture Coalition


Tel. 347.563.6408

RELEASE: New NSAC Report Projects Billions Saved Via Crop Insurance Subsidy Caps

Washington, DC, July 19, 2022 –– Today, the National Sustainable Agriculture Coalition (NSAC) published a special report projecting billions in taxpayer savings over 10 years if payment caps are instituted on federal subsidies paid to farmers who purchase crop insurance. The report comes ahead of tomorrow’s House Agriculture General Farm Commodities and Risk Management Subcommittee hearing on stakeholder perspectives on crop insurance. Most significantly, the report notes that these changes would impact relatively few farmers, have little effect on total insurance use, and make resources available for conservation programs and other initiatives that help farmers further reduce the risk of weather-related loss.

“Few farmers purchased crop insurance before premium subsidies were introduced in the 1990s, and it is a necessary incentive so all farmers can access a reliable safety net in the case of unpredictable disasters” said NSAC Policy Specialist Billy Hackett. “Today, however, many large commodity farmers possess the resources to continue purchasing insurance if premium subsidization were capped. Meanwhile, young, beginning, small, diversified, and Black, Indigenous, and people of color (BIPOC) farmers continue to experience obstacles which prevent them from receiving insurance benefits. Limitless subsidies are also known to increase land prices and rent, further barring underserved or aspiring producers from farming. The way we subsidize federal crop insurance should not pick winners and losers,” added Hackett

The report, An Economic Analysis of Payment Caps on Crop Insurance Subsidies, was written by Dr. Eric J. Belasco, a professor of agricultural economics at Montana State University who specializes in the study of federal agricultural support programs and risk management. 

“Savings in federal expenditures could be reallocated to other high priority programs (e.g., agricultural research, conservation, beginning farmer and rancher programs, etc.), reduce burdens on taxpayers, or reduce the federal budget deficit,” wrote Belasco, stating that: “Attention should be paid to establishing these policies so that they have the intended impacts and don’t allow for a mitigated impact through legal loopholes.” 

The 2023 Farm Bill presents the next meaningful opportunity to institute premium subsidy caps – and in fact, almost every payment limit scenario analyzed in the NSAC special report has been previously introduced and considered in Congress. It was widely understood there was adequate support among the Senate Agriculture Committee to advance payment limits during debate of the 2018 Farm Bill, but efforts were stymied on procedural grounds. 

“For some reason, crop insurance is the only subsidized farm program which includes no caps on the money that farmers can receive from the federal government,” notes Hackett. “It only makes sense that caps exist as they do in federal commodity and conservation programs to promote equitable outcomes. Otherwise, fewer and bigger farms will continue to mean less money circulating in local economies, fewer farm jobs in rural areas, and fewer opportunities for beginning and young farmers to get into the business.”

As special interests begin conversations to advance higher reference prices for commodity programs and permanently authorize ad-hoc disaster payments, NSAC instead believes Congress should invest in proven on-farm risk mitigation strategies to build resilient production systems and return added value to the taxpayer. 

On Thursday, July 28 at 2:00pm EST, NSAC will host a “Title XI Payment Caps Report Webinar” to present the findings of the special report in full. NSAC will be joined by the report’s author, Dr. Eric J. Belasco, along with panelists representing a range of ideological perspectives committed to these reforms.

Panelists include:
Dr. Eric J. Belasco, Agricultural Economist at Montana State University
Billy Hackett, Policy Specialist at National Sustainable Agriculture Coalition
Taxpayers for Common Sense
Scott Kinkaid, Owner, Gentleman Farms
Moderated by Mike Lavender, NSAC interim Policy Director  

Register here.

Read the full report here.


About the National Sustainable Agriculture Coalition (NSAC)

The National Sustainable Agriculture Coalition is a grassroots alliance that advocates for federal policy reform supporting the long-term social, economic, and environmental sustainability of agriculture, natural resources, and rural communities. Learn more and get involved at: https://sustainableagriculture.net


Categories: Commodity, Crop Insurance & Credit Programs, Press Releases

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