Congressional watchdog: Stop paying big farmers' crop insurance

Christopher Vondracek, Star Tribune on

Published in Business News

A new report from a congressional watchdog calls out subsidies for crop insurance to more than 1,000 of the nation's largest farmers as a waste of taxpayer money.

The Government Accountability Office, an independent, nonpartisan oversight agency, published a 73-page report this week highlighting that some of the $17.3 billion the federal government uses to pay down insurance premiums for farmers includes funds that go to roughly 1,341 of the wealthiest, including 41 in Minnesota.

Those so-called "high-income" farmers, according to the GAO's analysis, would purchase the insurance even without Uncle Sam's contribution. While calling crop insurance a vital "safety net," the agency said lawmakers could cancel subsidies for the highest earners and save taxpayers "millions of dollars."

"[I]f subsidies for such policyholders had been reduced by 15 percentage points," the report said, "the government could have saved about $15 million."

The GAO report identifies "high-income" farmers as those making over $900,000 annually in adjusted gross income. According to the report, that group represents less than 0.5% of the nation's farmers enrolled in federally-subsidized crop insurance, which topped out at over 460,000 policyholders.

For decades, crop insurance has been touted as part of a federal U.S. farm policy regime that has kept farmers in business and groceries relatively inexpensive. In 2022, some 234 million acres across the country were enrolled, spanning 133 agricultural commodities, including rangeland.


But as pressure has mounted on Capitol Hill to shrink the federal budget, some lawmakers are eyeing portions of the massive once-every-five-years farm bill, which also undergirds the nation's nutrition programs, for budgetary cuts.

According to the GAO report, the U.S. Department of Agriculture pays on average 65% of premiums for farmers who hold federally backed crop insurance policies. Fewer than 1% of farmers account for 22% of the federal spending on the crop insurance program.

During a stop in South Dakota this summer, Zippy Duvall, president of the American Farm Bureau, the nation's largest lobby of farmers, characterized crop insurance as "the cornerstone" of the farm bill, helping farmers weather financial pitfalls from drought to fluctuations in commodity prices.

This week, Dan Glessing, president of the Minnesota Farm Bureau and a Wright County farmer, said his organization supports strengthening risk management.


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