While it may have once helped protect the livelihoods of some small farmers in the face of natural disasters, the current crop insurance subsidy program is primarily a handout to large insurance companies and agri-businesses. Just four crops — soybeans, wheat, corn and cotton — received 90 percent of crop insurance payouts in 2012. Further, the 18 insurance companies authorized by the U.S. Department of Agriculture to sell crop insurance are able to capture a sizable share of these subsidies for themselves, reaping about 20 percent of the subsidies, or $10 billion in profits over the past decade.
A lot of the support for the Farm Bill seems to come from an interest in the idea of “saving the family farm,” a concept often romanticized by politicians and popular culture. Yet, the traditional “mom and pop” farm receives little of the farm subsidies. The bottom 80 percent of farmers receive, on average, $5,000 per year. In contrast, 10,000 large firms receive farm subsidies of $100,000 or more. The fact is that the agriculture business is dominated by large firms: About 73 percent of all farm income comes from the biggest 5.3 percent of farms. This is not necessarily a bad thing per se, but the public should know that the Farm Bill is primarily supporting large firms at taxpayer expense.
Read more: Mackinac Center