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Reps. Kind, DeLauro and Blumenauer Request GAO Report on Crop Insurance

WASHINGTON, DC—Representatives Ron Kind (D-WI), Rosa DeLauro (D-CT) and Earl Blumenauer (D-OR) today continued their effort for more transparency in the crop insurance program. They are asking the Government Accountability Office (GAO) to conduct a review of crop insurance payments and shed some light on how much of the payments go to wealthy individuals and families.

“The Federal Agriculture Reform and Risk Management Act of 2013 (H.R. 2642) passed in July by the House expanded crop insurance subsidies,” the representatives wrote. “According to the non-partisan Congressional Budget Office, these crop insurance subsidies will cost taxpayers $90 billion over the next decade. USDA reports it spent $14 billion on crop insurance last year alone.

“These subsidies overwhelmingly flow to the largest and most successful farm businesses. Unlike other farm subsidies, crop insurance subsidies are not subject to means testing or payment limits and farmers are not required to adopt basic environmental protections in exchange for premium support from the taxpayer.”

Members of Congress are currently negotiating a new five-year farm bill that could cut billions from nutrition and anti-hunger programs, while continuing—or even increasing—these crop insurance subsidies that have little to no oversight. Crop insurance payments are also not subject to means testing, payment limits or conservation requirements. The non-partisan Congressional Budget Office recently issued a report with common-sense recommendations for saving taxpayer dollars by reducing crop insurance subsidies.

 

The full letter follows:

November 18, 2013

 

The Honorable Gene Dodaro

Comptroller General of the United States

U.S. Government Accountability Office

441 G Street, N.W.

Washington, D.C. 20548

 

Dear Mr. Dodaro:

We write to request that the Government Accountability Office (GAO) conduct a review of farm subsidy payments, in particular crop insurance payments, under the Food, Conservation, and Energy Act of 2008.

The Environmental Working Group (EWG) released a report on November 7, 2012 showing that at least 50 billionaires, or farm businesses in which they had a financial interest, benefited from $11.3 million in traditional farm subsidies between 1995 and 2012.  It is of great concern to us that farm subsidies have been paid to such wealthy individuals. Many of the same billionaires may have also received premium subsidies through the federal crop insurance program. However, taxpayers have no way of knowing who has received this support because current federal law prohibits the U.S. Department of Agriculture (USDA) from disclosing the identities of crop insurance recipients.

Congress is currently negotiating a new Farm Bill that would reauthorize and possibly reform a wide range of agriculture and nutrition programs, including the crop insurance program. At the same time, Congress is also determining funding and policy for the food stamp program, which provides support to millions of low-income households, including over 21 million children.

The Federal Agriculture Reform and Risk Management Act of 2013 (H.R. 2642) passed in July by the House expanded crop insurance subsidies. According to the non-partisan Congressional Budget Office, these crop insurance subsidies will cost taxpayers $90 billion over the next decade. USDA reports it spent $14 billion on crop insurance last year alone.

These subsidies overwhelmingly flow to the largest and most successful farm businesses. Unlike other farm subsidies, crop insurance subsidies are not subject to means testing or payment limits and farmers are not required to adopt basic environmental protections in exchange for premium support from the taxpayer. While some farms annually collect more than $1 million in crop insurance premium support, the bottom 80% of policyholders annually collect about $5,000.

This may very likely be lawful, but it underscores the need for agricultural policy reform. Reform begins with accurate information. Accordingly, we would like a report answering the following key questions:

·         How many individuals or families with a net worth over $1,000,000 have or will receive farm subsidies under the current farm bill, the Food, Conservation, and Energy Act of 2008?

·         Of these individuals, how many meet the active farming requirements as defined in Title I of the current Farm Bill?

·         Of these individuals, how many are members of Congress?

·         How much money are each of these individuals receiving from farm subsidies? Over what time period?

·         What programs within the Farm Bill result in the most payments to those with an adjusted gross income greater than $1,000,000?

·         How many individuals or families with a net worth over $1,000,000 are benefiting from crop insurance premium subsidies?

·         Of these individuals, how many are members of Congress?

·         How large are the premium subsidies these individuals are benefiting from and how much are these individuals receiving in crop insurance indemnities? Over what time period?

Thank you in advance for your immediate attention to this request. Should you have any questions or need additional information, please contact a member our staff. We look forward to hearing from you on this important issue.

Sincerely,

Rosa L. DeLauro                                 

Ron Kind                                

Earl Blumenauer