A farmer and an insurance agent from Mebane have pleaded guilty to fraud charges related to a crop-loss scam. It cost you and me $8.4 million.
If you’re interested in agriculture, crop insurance, and the Farm Bill the U.S. House is expected to take up after the election, take a look at the reality of the taxpayer subsidies to farmer. This data comes from a News & Observer column written earlier this year by my husband, Rick Martinez.
More than 80 percent of crop policies sold to farmers guarantee income, according to a complex U.S. Department of Agriculture (USDA) formula that – you guessed it – tends to favor larger, established farmers over smaller, newer growers.
With revenue insurance, a farmer can harvest a bumper crop, get a good price that leads to a tidy profit…and still receive an insurance check.
Such a sweet deal doesn’t come cheap. So, Big Ag convinced Congress to force you and me to help pay the premiums. It’s quite a chunk of cash.
In 2011, the Government Accountability Office (GAO) calculated that American taxpayers picked up 63 percent of crop insurance premiums for farmers. That totaled $7.4 billion. But the subsidy doesn’t stop there. We also kicked in another $1.3 billion to help insurance companies write these policies.
Farmers harvested a bumper crop of cash from this arrangement. Last year, claims hit an all time high of $11 billion. What a country!
The upcoming debate in the U.S. House should be fascinating. Will the fiscal conservatives and/or Tea Party-associated members vote to do away with this kind of thing?
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