Home » EWG unimpressed with $5.1 billion disaster trust fund

EWG unimpressed with $5.1 billion disaster trust fund

Oct 22, 2007 10:42 AM, By David Bennett
Farm Press Editorial Staff

The latest farm bill-related report to come out of the Environmental Working Group tackles the Senate Finance Committee’s $16 billion Heartland, Habitat, Harvest and Horticulture Act of 2007. The provision calling for a $5.1 billion permanent disaster aid trust fund has Ken Cook, EWG president, especially exercised.

Those favoring the fund — including Finance Committee Chairman Max Baucus, D-Mont — claim it would help prevent the frequent Congressional battles over funding agriculture disaster payments (for more, see http://deltafarmpress.com/news/071005-tax-bill/index.html). Maybe so, says Cook, but it will also provide yet more taxpayer money for “chronic recipients” of disaster aid.

During a press conference shortly before the finance committee passed the new legislation, Cook expressed serious misgivings about the plan (see http://www.ewg.org/reports/disasterwaiting). Among his comments:

On the Senate Finance Committee taking up agriculture policy…

“(The Senate Finance Committee) is a different venue in many respects from the (Senate) Agriculture Committee and many of the members aren’t as steeped in the details of agricultural disaster aid and patterns of assistance…

“Fundamentally, (the finance committee plan) would take disaster aid to crop insurance and encourage people to buy more insurance while at the same time provide heftier disaster aid. And it would make that automatic and available via a trust fund. That would avoid the ad hoc disaster legislation that we see Congress struggling with virtually every year.

“So we wanted to see the geographic implications of that. The model for how this approach might be crafted … is important but so is the geography of disaster aid. That’s a backdrop to this that perhaps hasn’t received the attention it should as the committee begins its work.

“In terms of background, we’re able to trace disaster aid payments by recipient back 21 years — from 1985 through 2005. And before long we should have the 2006 data.

“Over that period, taxpayers have provided about $26 billion in ad hoc agricultural disaster aid. Most of that was to crop disaster assistance although additional money went to livestock aid.

“That $26 billion doesn’t include money paid through federal crop insurance or emergency economic assistance provided to farmers in the late 1990s through 2002 when ‘freedom to farm’ payments were effectively doubled.

“Over that 21-year period, USDA did send disaster checks out even if Congress didn’t take action on specific legislation each year. The payouts exceeded $1 billion in 11 of the 21 years…”

On the trust find…

“Now, the Senate Finance Committee is considering a permanent trust find that would set aside a reported $5 billion, or so, provided they can find the necessary offsets to pay for it. That would be a substitute for at least $5 billion worth of ad hoc disaster aid — presumably $1 billion worth per year.

“If past is prologue, our review shows that most of the money will go to just a few states where agricultural disaster emergencies are pretty routine and predictable, virtually annual occurrences. That’s primarily because of low rainfall and short growing seasons. These are the same states that are among the biggest recipients of crop subsidies and conservation aid and federally subsidized crop insurance claims.

“We looked at 20 states currently represented on the Senate Finance Committee. There are 21 members but Oregon has both of its senators on the committee.

“Over the past (two decades) the (states currently represented) on the committee have collected about $9 billion in ad hoc disaster payments. That’s just over one-third of the $26 billion paid nationwide.

“But only four of those states collected about 55 percent of that $9 billion. There is no reason to think the future disaster aid won’t follow the same pattern.”

On the need for a fundamental look at what agricultural policy ought to be...

“We’ve called for that before and I renew that call today… (The data we’ve released) does raise the question of the most appropriate use of resources out there. That’s up to individuals to the extent that it’s their land and their land to do what they see fit to do. We all like to think they protect the environment — and most do protect their resources.

“But the government has been sending signals basically encouraging people to take chances — and we’ve been doing it since the plains were first broken with the plow. We’ve been encouraging overly aggressive use of some resources in low rainfall areas.

“That debate needs to happen. Unfortunately, in the rush to consider a permanent trust fund we might be missing that debate to avoid something that’s unpleasant for everyone: trying to get through ad hoc disaster aid.

“I should point out that, over the last two years, EWG has supported ad hoc disaster aid for weather-related losses. We felt it was appropriate to not draw the line while people were hanging out there with serious losses to crops and livestock.

“But it’s one thing to say we should make people whole in an emergency. It’s another to look at the map (in the new EWG report) and see the repetitive nature of this and recognize it isn’t an emergency but is immanently predictable. It will happen almost every year over some part of the Great Plains and we should make some adjustments.

“I don’t know that’s the debate we’ll hear in the Senate Finance Committee over the permanent trust fund. My suspicion is we won’t…”

e-mail: dbennett@farmpress.com