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Triple dipping: House farm bill increases likelihood of wealthy farmers raking in billions each year

Environmental Working Group - Thu, 05/16/2024 - 06:28
Triple dipping: House farm bill increases likelihood of wealthy farmers raking in billions each year rcoleman May 16, 2024 Anne Schechinger May 21, 2024

Between 2021 and 2023, farmers across the country may have dipped into three types of taxpayer-funded federal farm support programs to collect more than $55.2 billion, according to EWG’s newly updated Farm Subsidy Database

The astounding amount of money in Department of Agriculture payments during these three years comes from four programs: crop insurance, two traditional commodity programs and a new farm subsidy program set up by the Trump administration in 2020, according to USDA data. 

Now a partisan proposal by the House Agriculture Committee would increase the likelihood that farmers will get paid two or three times for the same loss. 

Between 2021 and 2023, some farmers received payments from all three program categories – “triple dipping” at a time of historically high crop prices and farm incomes. 

The three USDA farm support program category payments covered four individual payout options:

The three program categories paid farmers billions of dollars

Farmers collected more than $55.2 billion during this time from the four programs.The vast majority of payments were crop insurance indemnities.. 

Crop insurance paid out four-fifths of total payments from all four programs, or $44.4 billion, over the three years. As EWG has disclosed crop insurance payments in 2022 were the highest in the program’s history, at over $19.3 billion.  

Payments from the ARC and PLC commodity programs made up almost $2.9 billion, and CFAP paid out over $7.9 billion between 2021 and 2023. 

Total payments from the four programs topped $19 billion in 2021 and 2022, and just above $16 billion in 2023. (See Figure 1.) 

Figure 1. Payments from the four programs between 2021 and 2023.

Image

Source: EWG, from the USDA Risk Management Agency,Cause of Loss Historical Data Files, and Farm Service Agency, Payment Files Information

Farmers in 3,111 counties across the country received payments from at least one of the three farm support categories. And in 2,632 counties, or 85 percent, farmers collected payments from all three. CFAP had the largest reach, with farmers in 99 percent of the 3,111 counties receiving payments. (See map below.)

Over half of all payments from these four programs, $29.2 billion, went to farmers in just six states – Texas, Kansas, North Dakota, California, Nebraska and South Dakota, in descending order of largest payments. The payments are very highly concentrated in just a few states – farmers in Texas and Kansas alone accounted for more than a quarter of all payments, or 27 percent. 

Interactive map Interactive map of crop insurance and farm subsidy program payments by county, 2021-2023. Click here

Taxpayers subsidize over 60 percent of crop insurance premiums, and indemnity payments are made up of premiums collected. Taxpayers foot the entire bill for traditional commodity subsidy programs and CFAP.

Subsidies mostly support wealthy farmers

National net farm income has gone up over time, reaching new heights between 2021 and 2023. (See Figure 2.) 

So this near-record amount of farm subsidies was distributed at a time when crop prices and farm incomes were at an all-time high and many farmers did not need the support for their farms to survive. 

Farm income was the highest ever in 2022 at $196.4 billion. The third and fourth highest net farm incomes were earned in 2021 and 2023, behind only 2013 and 2022.  

Figure 2. The most recent three years had some of the highest U.S. net farm incomes in history.

Image

Source: EWG, from the USDA Economic Research Service, U.S. net farm income and net cash farm income, inflation adjusted, 2003-24

From all the farm subsidy programs, the largest and wealthiest farms get the most money. In 2023, the top 10 percent of commodity subsidy recipients collected about three-quarters of the payments, or 74%. 

And while farmers whose annual income tops $900,000 are not eligible for commodity subsidies, they can still get premium subsidies and indemnity payments from the Crop Insurance Program.

According to the Government Accountability Office, over 1,300 of these high-income farmers had a taxpayer-subsidized crop insurance policy. The top one percent of crop insurance policyholders collected 22 percent of premium subsidies in 2022, the GAO found.

Some in Congress are trying to increase triple dipping

Despite record farm incomes, the partisan House Agriculture Committee 2024 Farm Bill, called the Farm, Food, and National Security Act of 2024, proposes to raise farm subsidies, increasing the likelihood farmers will continue to get paid multiple times, often for the same loss, for years to come. 

The recently released farm bill proposes to increase farmer payments through ARC and PLC by increasing reference prices, and expand the number of farmers that can qualify for these commodity subsidies. 

Reference prices determine whether farmers receive a payment from these commodity programs. Increasing reference prices to the levels proposed by the House farm bill would mean most farmers who participate in the programs, including most peanut, rice and cotton farmers, will get paid every year over the five-year lifetime of the farm bill.(See Figure 3.) 

Figure 3. Proposed increases to reference prices projected to lead to payments every year

Crop

Current reference price

Proposed reference price

Expected price, 2025

Expected price, 2026

Expected price, 2027

Expected price, 2028

Expected price, 2029

Rice

$14.00

$16.90

$14.99

$14.76

$14.65

$14.62

$14.67

Seed Cotton

$0.37

$0.42

$0.38

$0.37

$0.37

$0.37

$0.37

Peanuts

$535.00

$630.00

$458.40

$458.80

$459.00

$459.00

$459.20

Source: EWG, from the USDA Farm Service Agency, ARC/PLC Program DataThe Farm, Food, and National Security Act of 2024 and Congressional Budget Office, USDA Farm Programs Mandatory Baseline.

The bill would also expand crop insurance coverage, likely including more farmers in the program or increasing subsidies to farmers who already participate. 

If the bill is signed into law, these changes would likely increase the likelihood as well as the number of farmers who double or triple dip into the multiple farm support programs. The changes would also likely raise the amount of payments current program participants get. Additionally, thousands of farmers have already received farm subsidies for 39 years straight, and according to Congressional Budget Office projections, these changes would extend that another five or 10 years. 

A good time for reform

As has been proposed by the House Agriculture Committee, increasing farm subsidies would primarily benefit a few thousand peanut, cotton and rice farmers. Instead of providing more taxpayer dollars for farm subsidy programs, the programs should be reformed to save taxpayer money and make them more equitable for farmers.

There are many proposed reforms that could lower taxpayer costs or improve the equity of farm subsidy programs, including:

  • Reducing the income limit on farm subsidy programs so the wealthiest farmers do not qualify.
  • Setting an income limit for eligibility in the Crop Insurance Program.
  • Capping crop insurance so farmers can only receive up to $125,000 in premium subsidies per person.
  • Cutting administrative and operating subsidies paid each year to crop insurance companies.
  • Revising the Whole Farm Revenue Protection policy to bring more small, diversified family farms into the program.
Categories: G1. Progressive Green

Statements In Response to Vanguard’s CEO Announcement from the Vanguard S.O.S. Network of Civil Society Organizations

Stop the Money Pipeline - Wed, 05/15/2024 - 06:24

 

Statements In Response to Vanguard’s CEO Announcement from the Vanguard S.O.S. Network of Civil Society Organizations

Contact: TJ Helmstetter on behalf of Vanguard S.O.S., tjhelm@gmail.com 

In response to the news that Vanguard has hired Salim Ramji as its next CEO, members of the Vanguard S.O.S. campaign, which consists of civil society organizations focused on climate risk and responsible investing, released the following statements: 

“For the first time in its history, Vanguard is choosing an outsider to take the reins, and we are hopeful this indicates a willingness for the company to change course. With this leadership transition, Vanguard has an opportunity to move from climate laggard to climate leader. We urge incoming CEO Salim Ramji to remain consistent with his support for sustainable investment practices by fully addressing climate-related financial risks and meeting the moment presented by the ongoing energy transition.” – Nancy Treviño, Asset Manager-Campaign Manager of Stop the Money Pipeline. 

“Vanguard has repeatedly shown disregard for responsible climate risk management across its investments and stewardship practices. Vanguard continues to provide new capital for fossil fuel expansion and other drivers of the climate crisis, and has failed to use its enormous shareholder power to encourage portfolio companies to mitigate the systemic risks that will hurt its clients’ portfolios. Millions of people entrust their life savings to Vanguard and expect it will act in their best long-term interests. Vanguard’s new CEO has the opportunity to turn a new page and provide the climate leadership that its clients deserve and the world urgently needs.” – Ben Cushing, Fossil-Free Finance Campaign Director, Sierra Club

“Under Tim Buckley’s leadership, Vanguard has caved to right wing politicians and failed to adequately address the material risks of climate change – thus putting Vanguard clients’ investments at risk. This change in leadership offers an opportunity to steer the company in a new direction: one that puts responsible business over politics, puts long term financial security over short-term fossil fuel profit, and helps ensure a liveable planet for all of our futures.”  – Lina Blount, Director of Strategy and Partnerships of the Earth Quaker Action Team

Vanguard S.O.S. first launched in 2022 in order to push Vanguard away from climate catastrophe and toward sustainable investing. The network includes civil society organizations, social movements, and financial experts. 

Vanguard is the world’s largest investor in fossil fuels, with $268 billion in exposure, including $93 billion in coal alone, as per the most recent data available. Vanguard has provided billions of dollars in new bond purchases for companies developing some of the biggest, most destructive fossil fuel expansion projects in the U.S. and beyond.

Since the campaign’s launch, Vanguard has continued to lag behind even its slowest-moving industry peers, including BlackRock, State Street, and Fidelity. 

Earlier this year, the Vanguard S.O.S. network criticized the company for taking “marching orders” from climate denying politicians. Vanguard famously withdrew from the Net Zero Asset Managers initiative amid right-wing political pressure. However, Vanguard’s acquiescence to right-wing politicians does not seem to have played off in the long run, as the company remains in the political crosshairs, and was recently subpoenaed by Republican Judiciary Chairman Jim Jordan. 

Meanwhile, Vanguard’s own clients have demanded meaningful climate action, and even raised concerns about a breach of fiduciary duty.   

 

About Vanguard S.O.S.

Vanguard S.O.S. is an international campaign pushing Vanguard to chart a new course away from climate catastrophe and toward truly sustainable and responsible investing. The network is made up of civil society organizations, social movements, and financial experts working together to secure a climate-safe future for everyone.

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The post Statements In Response to Vanguard’s CEO Announcement from the Vanguard S.O.S. Network of Civil Society Organizations appeared first on Stop the Money Pipeline.

Categories: G1. Progressive Green

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