The Farm Bill Makes The Koch Brothers Richer While Destroying the Clean Water Act

The Farm Bill Makes The Koch Brothers Richer While Destroying the Clean Water Act

Farm Corporate Welfare

On Tuesday the Senate passed the “bipartisan” bicameral farm bill that languished for two years because Democrats and Republicans were locked in a heated debate on how much food to take away from poor people, and believe it or not there were progressives claiming the farm bill was a “win for us.” However, while some are congratulating Congress for “only” robbing $8.7 billion from the food stamp program, and Washington celebrates finally getting a farm bill passed, corporate agribusiness, the insurance industry, and the Koch brothers are celebrating a poisoned farm bill that adds to the Kochs fortune and decimates part of the Clean Water Act. If any American other than the Kochs, Americans for Prosperity, and corporate agribusiness is celebrating the farm bill, they obviously are unaware of what the bill entails and why it sailed through both houses of Congress with hardly a whimper from conservatives lusting for deeper food stamp cuts.

Both Democrats and Republicans boasted the repeal of $4.5 billion in annual direct cash payments to farmers (subsidies) that Senator Debbie Stabenow said “ends outdated and unnecessary subsidies.” House Agriculture Committee chairman Frank Lucas (R-OK) highlighted the savings by repealing the direct payments and saiddon’t underestimate the magnitude of the reforms;” reforms that surreptitiously deposited direct payment savings right back to corporate agribusiness by expanding crop insurance subsidies. The farm bill actually doles out the same amount of taxpayer money to farmers, mostly wealthy ones, as the old direct payment program. The new bill’s gift to corporate agriculture is the shift from direct payments to crop insurance that ensures them their free taxpayer money will be distributed in a hidden manner making it difficult to repeal later.

Supporters of the government crop insurance program claim it only pays farmers if they experience losses, but because the federally subsidized crop insurance program already pays nearly two-thirds of farmers’ premiums and insurance claims, it guarantees they will get more revenue whether a crop fails or prices drop below a certain level. The new farm bill expands the program at a cost to taxpayers of $7 billion more than the old bill. Last year farmers received $16 billion in crop insurance payments that were paid by the federal government, not an insurance company, regardless that net agriculture income increased by 15 percent. The biggest beneficiaries of crop insurance payouts are corporate agribusiness because there are  no limits to premium support that means the biggest and richest businesses reap the most benefits. A critic of crop insurance, the Environmental Working Group, estimated that 10,000 policy holders receive over $100,000 each in crop insurance subsidies annually, and under the law the names of individual businesses getting support are secret so members of  Congress receiving subsidies will not be disclosed to the public.

(Continued Below)

The public is also likely unaware that private insurance companies administering the program received $1.3 billion for administrative expenses in 2011 despite the fact that the crop insurance program is paid for by the government. Crop insurance is extremely lucrative for companies administering the program who earn, on average, a 30% return and recorded $10 billion in profits over the past decade. It is so profitable for insurance companies that insurers regularly cover high-risks where farmers plant in low-yield areas because they will get rewarded either way.  Crop insurance also included “Price Loss Coverage” where farmers receive taxpayer payments if prices for corn, soybeans, or 12 other crops fall below a certain level. The new farm bill raises that floor price in ways that guarantee there will always be payouts for some crops making Price Loss Coverage duplicative as well as forces taxpayers to guarantee revenue for private businesses.

One of the private businesses guaranteed more revenue is the Koch brothers whose Americans for Prosperity belief-tank spent no small amount of money advertising and demanding food stamp cuts it claimed was a terrible waste of taxpayer dollars. The Kochs asserted the farm bill serves “special interests and powerful corporations” over taxpayers to garner opposition to it unless it included huge cuts to food stamps. Although the food stamp cuts were not as barbaric as the Kochs wanted, the final version contained two very special gifts for the Koch brothers’ special interests and their powerful corporations.

Republicans preserved $881 million in “mandatory” spending for biomass energy that Koch Industries’ subsidiary, Georgia-Pacific, uses to collect a very significant amount of taxpayer-funded government subsidies. The Koch company applied for and collected biomass crop assistance and reports from lobbyists revealed that Koch Industries pressured Republicans to preserve the Biomass Crop Assistance Program (BCAP) program. Records also show the executive director for Koch Industries asked the Department of Agriculture to expand the BCAP program to include forestry eligibility that was included in the bill to benefit the Koch brothers.

The new bill also includes a measure that guarantees runoff of pesticides and other chemicals from forestry operations, including mills, cannot be regulated under the Clean Water Act as industrial pollution. An amendment included for the Koch brothers defines the “EPA’s treatment of forestry operations as non-point sources of pollution under the Clean Water Act.” The environmental group Wild Oregon asserted that prohibiting the EPA from classifying pesticides and chemicals as pollution was the result of an effort to overturn “a recent court ruling that pollution originating from active logging roads be treated similarly to other industrial activities.” The group says the amendment poses “a serious risk to countless rivers and streams in Oregon that have been damaged by poor logging and road building practices as well as pesticide and chemical runoff.”  Koch industries got help from timber companies and energy corporations to expand the biomass energy program, and their company Georgia-Pacific got lobbying assistance for the amendment banning the EPA from regulating pesticides and industrial chemicals used in the lumber industry.

Republicans stepped up and complied with the Koch brothers’ demand to poison the water and reap free taxpayer money for biomass while they obeyed the Kochs’ Americans for Prosperity and cut funding for food stamps that some on the left claimed was “a victory for our side” because it “only” cut $8.7 billion from the SNAP program affecting 15 blue states exclusively. It is a sad prospect indeed when any non-teabagger or Republican regards any food stamp cuts as a “victory,” but that is what happens when cuts are relative to what Republicans could have slashed from food assistance for the poor.

The farm bill is due to hit President Obama’s desk on Friday and it did not, as Republicans and some Democrats claim, “reform” the system of handing free taxpayer money to corporate agribusinesses when it really locks that welfare in place through misdirection. It was easy for critics of agricultural subsidies to denounce farmers getting paid directly for not planting their fields, but few will decry excessively generous insurance payouts; particularly when it is done in secret like the new farm bill demands. Republicans learned how to hide payouts during the Bush Iraq war debacle, and keeping the focus on “cutting wasteful food stamp funding” from underserving poor people served its purpose in distracting the public and pundits from the farm bill’s generous gifts to undeserving corporate agribusinesses and Koch Industries. The real giveaway that the farm bill is poison was how easily it passed the House where Republicans had demanded $40 billion in cuts to food stamps, but settled for less because of the billions that will go to the Kochs’ and the toxic chemicals that will go into the water supply.

 

Recent posts on PoliticusUSA