Posted: Thursday, December 28, 2006 6:00 pm
Nebraska’s 3rd Congressional District received some unwanted publicity this week when it was identified as the “king” when it came to farm subsidies.
That had to be an offensive label for residents of this sprawling, sparsely populated landscape of ranches and farms who pride themselves on a tradition of doughty self-reliance.
The district was stuck with the “subsidy king” moniker because it collected $992 million last year in farm subsidies, more than any other district in the country.
In the past decade the district has hauled in $6.8 billion in government farm subsidies. Meanwhile farmers and ranchers in the state as a whole collected $9.7 billion during the same period.
The ten-digit sums show how much is at stake as congress prepares to write a new farm bill this year. Imagine how Nebraska’s economy would have fared without that massive infusion of cash. Could rural families and small town businesses have survived without the government aid?
The latest disclosures on farm subsidies came as a result of a Freedom of Information Act filed by the Environmental Working Group, which notes on its website that “this information should be highly useful as Congress takes up reauthorization of federal farm subsidy programs next year.”
They were only the latest in a series of embarrassing revelations about misuse of taxpayer money in agricultural programs.
As Journal Star ag columnist Alan Guebert observed recently, finding waste and corruption in American farm programs is like hitting a bull in the backside with a two-by-four; it’s hard to miss.
But the Washington Post turned over some new ground recently when it reported on the growth of the billion-dollar crop insurance industry.
Congress originally turned to the concept a quarter century ago in hopes that it would be an alternative to regular infusions of disaster aid. Congress, however, found it impossible to resist the impulse to dip into the treasury when drought or other calamity struck.
So farmers now can collect both disaster aid and crop insurance. Meanwhile the 17 firms that sell crop insurance are making substantial sums. In the past eight years crop insurance companies have made $3.1 billion in profits while the government has lost $1.5 billion, according to the Washington Post. The government subsidizes premium payments for farmers and also pays administrative fees to the companies.
“We would probably be better off just giving the farmers the money directly,” Bruce Babcock, an ag economist at Iowa State University told the newspaper.
At congressional hearings in Nebraska and elsewhere in farm country last summer considerable support was expressed for the status quo in farm programs.
But the number of voice calling for reform is reaching unprecedented numbers. And they’ll be coming to Washington armed with facts.