ST. LOUIS — Taxpayers are paying billions to insure the crops of America’s largest farmers, but those getting the money remain anonymous.
A study by the Washington, D.C.-based Environmental Working Group, which shows that U.S. farms are increasingly subsidized by a U.S. government that’s considering a nearly $1 trillion agriculture reform act. The nonprofit EWG focuses on protecting public health and the environment.
A leader of the crop insurance industry counters the report, saying the study is misleading by “taking liberties with words.”
EWG, using the Freedom of Information Act, obtained records that show more than 10,000 farming operations in 2011 received federal crop insurance subsidies — in amounts from $100,000 to more than $1 million.
A Missouri operation was one of 26 in the U.S. that received more than $1 million, but the farm’s identity is unknown because federal laws prevent it from being made public.
“The eye-opening analysis shows crop insurance is not only very expensive, but also very generous to large and highly profitable farm businesses,” EWG senior vice president Craig Cox said in a statement. “Now the public needs to know who they are.”
That’s not likely to happen.
Kimberly Smith-Brown, director of public affairs for the U.S. Department of Agriculture’s Risk Management Agency, told Missouri Watchdog that federal law prohibits her organization from disclosing the names of the farms and their owners.
“We are governed by the Privacy Act and therefore cannot release information about private citizens,” she said.
The Privacy Act of 1974 prevents all federal agencies from providing certain personal information about individuals that could include specific personal identifiers, such as a Social Security number.
The EWG list shows that three more Missouri farms got at least $500,000 in subsidies, while 36 received more than $250,000, and 400 were given at least $100,000.
David Graves, manager of the American Association of Crop Insurers, a nonprofit industry service organization, told Missouri Watchdog that the numbers are misleading.
He said the USDA and insurance companies have an arrangement in which they share in losses and gains. Farmers buy insurance policies at a discount to cover such acts of nature as droughts, floods and freezes, with the USDA subsidizing the plans.
The government helps cover the costs if a claim is filed, but rarely does a farmer receive a large check — and certainly not for $1 million or more, Graves said.
“On (a) farm, if there is no loss, the government didn’t pay a penny,” Graves said. “That farm didn’t receive anything. To the contrary, the farmer had to cut a check to the government for the premium.”
EWG did not return calls from Watchdog seeking comment.
A U.S. Government Accountability Office report to Congress in April indicates plenty of farmers are receiving hefty checks through various farm-subsidy programs.
That study showed the cost to the government for these subsidies has increased from $1 billion to $7.3 billion in the past decade, due both to more farmers participating in subsidy programs and poor management controls by the USDA.
This included the USDA, for 2003 to 2006, paying $50 million to thousands of farmers whose income exceeded the eligibility cap of $2.5 million. The USDA told the GAO that proper controls were implemented in 2009 to prevent such occurrences.
The GAO report says the USDA failed to determine whether the estates of recently deceased farmers met conditions to receive $1.1 billion in farm-program payments between 1999 and 2005. Payments also may have been made to hundreds of people — with only limited involvement in farming — who failed to meet the criteria for the program funds.
EWG made its study public as Congress considers the Agriculture Reform, Food and Jobs Act of 2012, a massive $970 billion proposal that will set the country’s food and family policy.
The U.S. Senate is working on a version that will end $5 billion in annual direct payments made to farmers, even if crop conditions are good. It also would prevent people with an adjusted gross income of more than $750,000 from receiving government assistance.
A provision of the legislation would guarantee payments of up to $50,000 if crop prices drop.
The U.S. Senate Committee on Agriculture Nutrition and Forestry said the plan will cut the budget by $23 billion.
EWG found that the bottom 80 percent of policyholders averaged subsidies worth about $5,000 each in 2011. The smaller operations would not be affected by the limits now being debated by Congress. The USDA’s Economic Research Service considers as small farms those with sales of less than $50,000.