News: CJ Exclusives

New report shows farmers double-dipping taxpayer subsidies

N.C. farmers included in Environmental Working Group survey of farmers collecting both crop insurance and risk- or price-loss payments

Photo courtesy Pixabay
Photo courtesy Pixabay

A newly released report from the Environmental Working Group — a nonprofit, nonpartisan organization — found farmers are double-dipping federal farm subsidies, costing taxpayers billions. Some North Carolina farmers took advantage of the practice. (Read the report here.)

The double-dipping has cost taxpayers almost $23.9 billion, based on research conducted by EWG’s Anne Weir Schechinger, senior economics analyst, Craig Cox, the group’s senior vice president for agriculture and natural resources.

The U.S. Department of Agriculture subsidizes farmers for crop losses through crop insurance, but in the 2014 farm bill, Congress added additional farm income subsides. Those payments kicked in after crop prices declined in 2014 and 2015. Agricultural Risk Coverage or Price Loss Coverage payments are triggered when crop yields or prices, respectively, are lower than expected.

Farmers have to choose between the ARC or the PLC, but they also can qualify for the crop insurance program. In the 2014-15 growing season, the ARC program doled out $10.4 billion and the PLC program paid out $2.7 billion, while the revenue-based crop insurance program paid out $10.7 billion for the same crops covered by ARC and PLC payments.

The EWG report found most double-dipping in 2014-15 came from duplications of crop insurance and ARC payouts. Twenty-eight states, including North Carolina, accounted for 98 percent of all ARC, PLC, and crop insurance payouts.

Farms in Robeson, Columbus, and Beaufort counties received the most payouts in North Carolina, totaling around $41 million in both ARC/PLC and crop insurance payments. The EWG’s Farm Subsidy Database shows in 2016 North Carolina received $285 million in subsidies, with soybean and corn crops receiving the highest amounts. Even so, the 2007 USDA Census of Agriculture reported only 26.2 percent of North Carolina farmers collected government subsidies.

EWG says subsidies largely flow to farmers who aren’t struggling financially.

“Between 1995 and 2016, the top 10 percent of farm subsidy recipients received 77 percent of all crop subsidies,” Schechinger and Cox explained in their report. “The smaller family farms that rely on farm income and are likely in trouble today get the crumbs.”

In 2015, farm households earned a median income of $76,735 — more than the median income for all U.S. households during the same year, EWG reports. Furthermore, in 2014 farming accounted for only 6 percent of all jobs in rural areas.

EWG is calling for reforms of the farm subsidy program to stop “multiple payments from going to the same farmers in the same counties to cover the same ‘drop’ in revenue from crop sales.”

“As Congress begins debate on the next farm bill, expected to be passed next year, USDA subsidy data show that double-dipping is an indefensible scheme: It not only fleeces taxpayers, but also fails to address the real economic and environmental problems plaguing farm country,” the authors argue.