Today’s New York Times reports on the proposed increases to crop insurance programs tucked into the farm bills being considered on Capitol Hill—that have the potential to cost taxpayers billions:
“The new farm bills would increase the crop insurance programs by $9 billion and include an additional subsidy called the “shallow loss” program, which would cover farmers for modest crop yields or declines in prices.
Several conservative groups, including the Heritage Foundation and the American Enterprise Institute, as well as environmental organizations including the Environmental Working Group, oppose crop insurance subsidies, which they say amount to income protection, rather than protection against crop losses from drought or natural disasters. The Obama administration has called for cuts to all of the farm subsidies including the crop insurance program.”
While AEI doesn’t take institutional positions on this—or any other—issue, I have frequently written that largely wealthy farmers do not need additional farm bill welfare. A study I conducted with Barry Goodwin and Bruce Babcock found that the shallow loss programs being considered could cost taxpayers over $20 billion.
As I have written before, “At a time when severe budget pressure is forcing legislators to consider cuts to food stamps, it does not seem appropriate to double down on wasteful farm subsidies that largely flow to wealthy households. Shallow-loss programs are not reforms; they are a big step backward.”