This big entitlement flies under the radar: federal crop insurance subsidies for U.S. farmers

Watching events unfold in Washington, D.C., these days is much like watching Wile E. Coyote pursue the Road Runner in the cartoons from years gone by.

When the Coyote and the Road Runner were on the screen, you knew what was coming next.

So it is with the federal income tax overhaul bill that Republicans in Congress are determined to approve this week and send to President Trump.

We know what will be coming next: Federal budget-cutting.

To hear supporters tell it, the tax changes will unleash dramatic expansion of the nation’s economy like we haven’t seen in more than a generation. What’s more, they assure us, thousands of jobs will be created and pay raises for American workers will be larger than they have been in many years.

This economic surge will bring in so much additional tax revenue that the tax cuts really won’t cost the federal government anything, supporters promise.

Of course, if you cupped your ear and listened closely, you could hear a buzz already starting to build. This buzz is coming from Republicans in Congress who see the need for welfare and entitlement reform --- such as in the Supplemental Nutrition Assistance Program, commonly known as food stamps.

Politicians love to point to “abuses” in the food stamp program, like the person who supposedly was seen in a supermarket checkout line buying lobster with his SNAP card.

I’m not naïve. There are random abuses that Congress and the U.S. Department of Agriculture ought to address.

But it’s hard to work up a lot of resentment toward a program that helps the needy buy food. The average recipient receives about $125 a month. That’s $1,500 a year.

For a person to be eligible for food stamps, his or her income can’t top about $19,200 a year.

House Speaker Paul Ryan, in a Wile E. Coyote moment earlier this month, said, “We’re going to have to get back next year at entitlement reform, which is how you tackle the debt and deficit.”

That’s when the House and Senate will slide the food stamp program under the microscope.

Of course, the majority of food stamp recipients are the elderly and the disabled and cannot work. Then there are other recipients, the so-called working poor, whose jobs don’t pay enough to keep their families out of poverty.

There is another “entitlement” ripe for reform --- but don’t expect it to get the scrutiny that food stamps will. This is the taxpayers’ huge subsidies for crop insurance for farmers.

Crop insurance has been around for a long time. Traditionally, farmers bought policies that pay out when weather causes poor yields --- from hail storms that pulverize fields or drought conditions that wither crops.

But these days, farmers increasingly are buying crop insurance policies that guarantee them a certain level of revenue from their fields, regardless of what happens to commodity prices between planting and harvest, and regardless of what happens to their yields.

We live in a state where insurance companies are huge businesses. Buying insurance is something smart farmers do. But the noteworthy aspect of crop insurance is that most of the cost is paid taxpayers, not by the farmers who benefit.

That government subsidy covers about 62 percent of the crop insurance premiums, according to an analysis of government data. Those government premium subsidies now cost taxpayers about $8 billion a year.

In 2011, a study by the Environmental Working Group organization found that 10,000 farming operations in the United States each received crop insurance premium subsidies that ranged from $100,000 to more than $1 million.

Unlike food stamps, where eligibility is based on income, there is no means-testing involved in determining eligibility for crop insurance premium subsidies. This is akin to billionaires like Warren Buffett and Bill Gates being able to receive food stamps.

Iowa’s Sen. Charles Grassley has been thwarted in his efforts to set common sense limits on how much individual farmers can collect in crop insurance indemnity payments.

Farmers are near and dear to our hearts because of the role they play in putting food on our tables. But still there is something unseemly about the federal government writing checks each year – with no strings attached – to cover two-thirds of the cost of the premiums for farmers’ crop and income insurance.

If you own any other business, from a grocery store to a gas station, wouldn’t you like to be able to buy government-subsidized insurance that compensates you if sales fall short of what you hoped for?

There is also irony in this you shouldn’t overlook.

The tax bill Congress votes on this week puts more of the wealthiest Americans’ estates off-limits to the Internal Revenue Service at the time of their deaths. Opponents of the estate tax say these people built their estates on their own.

Defenders of the estate tax talk about how it is one way government can recover a tiny fraction of the assistance taxpayers provided to these people. That assistance takes many forms --- military security, excellent schools, medical research.

Another form are those crop insurance subsidies.

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Randy Evans is executive director of the Iowa Freedom of Information Council and retired opinion editor at the Des Moines Register. He is a native of Bloomfield, Iowa, and now lives in Des Moines. He can be reached at

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