Farm leaders respond to EWG report

The Environmental Working Group issued a report Tuesday claiming that farmers are getting paid twice for the same loss, but a series of farm leaders said EWG got its facts wrong.

In a six-page report titled “Double Dipping: How Farmers Get Subsidized Twice for One Loss,” EWG pointed out that farmers sometimes get paid from both crop insurance policies and either the Agricultural Risk Coverage program or Price Loss Coverage program when they have a bad crop.

“ARC, PLC and crop insurance each define ‘losses’ in different ways, but in the end they pay out for the same reason: failure to meet expectations for crop yield or revenues,” said Anne Weir Schechinger, EWG’s senior economics analyst and co-author of the report.

“In most businesses, when you don’t make as much money as you had hoped, you don’t get compensated by the government at all,” added Weir Schechinger. “Who gets paid twice? This is the sort of ‘solution’ that can only come from Washington, and it’s costing taxpayers billions.”

National Farmers Union President Roger Johnson said, “Farmers Union has consistently supported payment limitations so that program benefits flow to average family farmers and ranchers. But EWG’s underlying argument that agriculture is like ‘most businesses’ is out of touch, incorrect, and potentially dangerous. Agriculture is essential, and our nation’s food security should be considered our national security.

“Market signals do not work in the same way as they do in ‘most businesses,’ so no matter whether the market is up or down, family farmers and ranchers are going to continue to increase supply,” Johnson continued. “That’s why it’s vitally important to have each one of the farm safety net programs, so that when times are as tough as they are today, family farmers and ranchers can stay in business growing our nation’s food, fuel, feed and fiber.”

EWG also pointed out that, in 2015, “farmers in six states – Iowa, Minnesota, Nebraska, Illinois, Kansas and North Dakota – received more than half of PLC, ARC and crop insurance indemnity payments.”

But Johnson noted, “Family farmers in states like Kansas and North Dakota averaged net farm income below the poverty line in 2015. These programs are for that express purpose – to mitigate loss when disaster strikes or when markets collapse.”

Tom Sell, a former House Agriculture Committee aide who is now in a lobbying firm with former House Agriculture Committee Chairman Larry Combest, R-Texas, said, “This is classic EWG — misusing data to prey on misunderstanding rather than shedding real light. ARC and PLC provide marginal decoupled help against deep systemic losses, including currently depressed prices that have resulted in a 53 percent drop in net farm income over the last three years. Crop insurance, on the other hand, is a product farmers purchase to cover their individual production risk on the farm.

“Even together they do not make a farmer whole, but they can mean the difference between survival and bankruptcy. In all cases, the farmer would hope for good weather and favorable markets so that neither would trigger,” Sell said.

Mary Kay Thatcher, a lobbyist for the American Farm Bureau Federation, added that “ARC and crop insurance cover two different risks. ARC covers county risk and most crop insurance covers individual risk — two very different things.”

–The Hagstrom Report