Has your farm experienced losses from extreme weather or disease outbreaks? Do you have safeguards in place to help your farm get through a disaster? Congress is re-authorizing farm safety net programs and hearing testimony from commodity farmers. To make fair programs in the Farm Bill, Congress needs to hear from all kinds of farms. Sharing your farm story can help make farming fair for everyone. Let’s tell Congress the whole story of managing the risks of farming. If you would like to tell your story, please reach out to laurie@cfaky.org.
Why Does Crop Insurance Need Reform?
- Fruits, Vegetables and Meats Receive Minimal Support
One of the purposes of the federal crop insurance program is to keep food costs low by ensuring a cheap and plentiful food supply. But the program subsidizes some foods more than others. Way more subsidies go to commodity farms than to farms growing fruits, vegetables and nuts.
The graph below demonstrates that the majority of federal crop insurance payments went to only 4 crops: corn, soybeans, wheat and cotton. All other crops shared 20% of payments.
Meanwhile, the USDA recommends a diet that is half fruits and vegetables. Where is the support for these recommended foods? In the graph below, Fruits and vegetables fall into a category of crops that USDA calls “specialty crops”. These crops get a small portion of the benefit of federal crop insurance – less than one fifth.
How does all this affect food prices? Foods with white flour, soybean oil and high fructose corn syrup are all heavily subsidized. Fruits and vegetables and proteins are not.
- Farms with Higher Sales and Income Receive More Benefits
Federal crop insurance is a program meant to keep farms from going out of business when disaster strikes, and that’s a good thing, but not all farms benefit, especially not smaller farms. The farms that benefit most often from crop insurance support are farms with higher numbers of annual sales and income. This means that smaller farms which already have less financial support and stability are not getting needed support.
As the graph on the right demonstrates, the system is so out of balance that the biggest 10% of farms by sales gain nearly 70% of crop insurance subsidies!
In the graph below, the farms with the highest sales are most likely to benefit from crop insurance subsidies. In Kentucky, only 9% of farms are bringing in over $100,000 in sales, at a level where participation in crop insurance is high. All those long, dark blue bars show that most modest to lower income farms don’t get the benefits.
- Larger Farms Are Receiving More Benefits
By acreage of cropland, the biggest farms are doing all right, but the average Kentucky farm is 171 acres. Most farms of that size or smaller, again, are not getting the benefit.
Does this seem fair to you?
Does this allocation of benefits seem fair to you? Why is our system giving the most benefits to the biggest farms who are best positioned to recover from a loss?
Congress is currently writing the next farm bill. Testimony from ag interest groups is that they need more money for crop insurance. Congress needs to hear from you!
If you are interested in getting involved, please contact laurie@cfaky.org.
