Triple dipping: How some farmers got paid three times for the same decreases in crop prices

Between 2018 and 2020, farmers across the country likely dipped into three types of taxpayer-funded farm support programs to the combined value of $91.6 billion, an EWG analysis found.

The eye-popping amount of federal payments during these years comes from crop insurance, traditional farm subsidy programs and new programs set up by the Trump administration. The most common loss across these programs was a decrease in crop prices.

Thanks to unprecedented Trump-era giveaways, some farmers received three payments:

  • An indemnity from their government-subsidized crop insurance policy
  • A payment from one of two traditional subsidy programs tied to crop prices or revenues
  • A third payment from one of two programs designed to offset the effects of President Donald Trump’s trade war or Covid-19

Payments from the five programs often compensated farmers for the same decrease in crop prices. The lion’s share of the payments flowed to the largest subsidy recipients, EWG found.

For example, the top 10 percent of recipients of the Market Facilitation Program, or MFP – created to offset Trump’s trade war with China – received almost 60 percent of all MFP funding in 2018 and 2019.

Total payments from the five programs at issue more than doubled, from almost $18.6 billion in 2018 to over $41.6 billion in 2020.

In 2017, EWG documented double dipping by farmers. Farmers were paid twice for the same decrease in crop prices – once through the taxpayer-subsidized Crop Insurance Program, which compensates farmers with an indemnity when crop yields or revenues decline, and a second time through traditional commodity subsidy programs linked to crop prices or revenues.

This lasted until 2018, when farmers began to get compensated a third time for the same loss.

Farmers and taxpayers pay into crop insurance premiums every year. Taxpayers shoulder 60 percent of the cost, on average, and indemnity payments are made from premiums collected. Taxpayers foot all – 100 percent – of the cost of traditional commodity subsidy programs.

Triple dipping was made possible by the Trump administration’s addition of two new programs, MFP and the Coronavirus Food Assistance Program, or CFAP. As with MFP, the top 10 percent of CFAP recipients received more than 60 percent of all CFAP spending for 2020. But CFAP continued to make payments to farmers, even as crop prices increased to decade-high levels.

Figure 1 below shows how much each program paid out between 2018 and 2020. The two traditional subsidy programs and the Crop Insurance Program paid farmers every year – MFP paid farmers for years 2018 and 2019, and CFAP paid farmers for 2020. (See the methodology for more information.) 

Figure 1. National payments from the Crop Insurance Program, commodity subsidy programs, MFP and CFAP between 2018 and 2020

Graph for triple dipping report

Source: EWG, from USDA Risk Management Agency, Cause of Loss Historical Data Files and USDA Farm Service Agency payment files

In the 3,112 counties that received a payment from any of the five programs, farmers in almost 70 percent of counties received payments from at least four programs in 2018 and 2019.

More than half – 55 percent – of counties got payments from at least four programs in 2020.

More than half of all payments during this time – over $46.4 billion – went to just eight farm states. California was not one of the top eight states, but four of the top five counties that received the highest payments nationally were in California.

The interactive map below shows how much money each county received from the five programs between 2018 and 2020.

Triple dipping map
Featured map
Interactive map: Crop insurance payments and farm subsidies by county

This map shows county-level indemnities from the federal Crop Insurance Program, as well as farm subsidy payments from the Agriculture Risk Coverage, Price Loss Coverage, Market Facilitation, and Coronavirus Food Assistance programs, from program years 2018 through 2020. 

Click here

Payments from these programs likely went to the same farmers in the same counties to cover the same reduction in crop prices. Experts at the Government Accountability Office even found the Department of Agriculture overpaid some farmers through MFP – they were paid more by this program alone than was justified by the value of what they lost because of lower prices.

To remedy repeat payments for the same crop price decreases, and to level the playing field, Congress should reform crop insurance to consider, when subsidizing premiums, whether farmers have received other federal payments. It should use reasonable payment limits and disqualify farmers whose income falls above a designated income level from getting taxpayer-funded premium subsidies.

Congress should also reject calls for more subsidies and increase the transparency of farm subsidy programs and the Crop Insurance Program.

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Methodology

Crop insurance

The indemnity data in this analysis come from the Department of Agriculture’s Risk Management Agency’s Cause of Loss Historical Data Files. EWG analyzed crop insurance indemnities between crop years 2018 and 2020 for all counties in the country. The crop year is usually the year when the crop is harvested. So crop insurance payments made for crop year 2018, for instance, were made for crops harvested in calendar year 2018.

As EWG has shown, crop insurance payments worth billions of dollars have been triggered by crop yield reductions due to extreme weather like drought and excess moisture. But decreases in crop prices also frequently generate payments. According to EWG’s Crop Insurance Database, declines in crop prices paid out the fifth most insurance payments between 1995 and 2020, compared to all other insurance causes of loss.

Because of this, not all crop insurance indemnities described in this report were paid out due to a decline in price. This article includes all crop insurance indemnities made for crop years 2018 through 2020, for all causes of loss.

Farm subsidy programs

The two traditional commodity farm subsidy programs described here are the Agriculture Risk Coverage Program, or ARC, and Price Loss Coverage Program, or PLC. These programs were established in the 2014 Farm Bill and pay farmers for declines in crop prices or revenues. Farmers must choose to participate in either ARC or PLC. ARC pays out when farm revenues drop below set revenue guarantees, and PLC payouts are triggered if the crop price drops below a floor called the reference price, which is set by Congress in the farm bill.

MFP was created by the Trump administration and paid billions to farmers in 2018 and 2019 for losses driven by tariffs placed by China on agricultural imports from the U.S. in retaliation for President Donald Trump’s trade war. MFP paid farmers for those two years in response to lower crop prices that were triggered by the trade war. 

CFAP was announced by the Trump administration in April 2020, and payments continued in 2021 under the Biden administration. The goal was to pay farmers “where prices and market supply chains have been impacted” by the Covid-19 pandemic. So this program also paid farmers for reduced crop prices. It kept sending billions of dollars to farmers, even when crop prices started to go up at the end of 2020 and throughout 2021. 

The ARC, PLC, MFP and CFAP subsidy data come from the USDA Farm Service Agency’s payment files. This data was also analyzed for all U.S. counties between 2018 and 2020. The payments in this analysis are provided by program year, defined as the year of the loss that triggered the payment. But the payments could have been paid out in years other than the program years.

For example, farmers received ARC and PLC payments for program year 2018 in calendar year 2019. In this analysis, those payments are distributed in 2018. And CFAP paid farmers in both 2020 and 2021, but the USDA assigned all the payments to program year 2020 in the data. So even though the payments for the four farm subsidy programs may have been made in different years, in this analysis they were all assigned to their program years.

The farm subsidy data is provided by the Farm Service Agency at a recipient level. EWG summarized payments up to the county level to analyze which counties received farm subsidies each year between 2018 and 2020.

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