As the end of the year nears, lawmakers are stuck. A $110 billion “emergency” supplemental for Israel, Ukraine, and border security failed in the Senate. The first rung of the laddered continuing resolutions, or extensions of current annual spending bills, expires January 19th, so another deadline is just over a month away. There is little time to get much done.

Two recently released government reports, however, shine light on a fertile area where some much-needed savings can be harvested. If lawmakers want to get serious about our burgeoning debt while making government work for taxpayers instead of special interests, they need to look at farm subsidies.

As part of its routine end-of-the-year accounting, last Thursday, the U.S. Department of Agriculture’s Economic Research Service (USDA-ERS) released its updated report on farm income. Net farm income (a broad measure of profits) for 2023 is projected to be $151.1 billion, a dip from 2022 profits, but still the fifth best year (inflation-adjusted) since USDA began keeping records in the early 1900s. Combined with 2022’s RECORD $189 billion mark and 2021’s $155 billion (all inflation-adjusted), the agriculture sector is experiencing a three-year level of profitability not seen since the post-war boom of the late 1940s.

It’s not just farmers cashing in.

This week, the Governmental Accountability Office (GAO) released a detailed report on some of the blessings bestowed on participants in this profitable part of the economy. A new report by the nonpartisan investigative arm of Congress dug deep into the highly subsidized federal crop insurance program. It turns out this program, which cost $17 billion in 2022, sent egregious taxpayer subsidies to private insurers and large mega-farms.

The combination of agriculture experiencing some of its most profitable years in history – plus record high costs for the taxpayer-financed safety net – should spur lawmakers into reevaluating that very inaccurately termed safety net. And they should start with crop insurance.

It’s important to note that federal crop insurance is not really insurance, at least not like homeowners, health, car, or other insurances most people are familiar with. Under normal insurance, a customer pays a premium to buy a policy that pays out after some sort of loss, say a car crash. Companies set their premium rates high enough to cover likely losses, plus a profit, and they build in the cost of advertising and servicing those policies into the price. In a good year, you pay your insurance and don’t make a claim (because you didn’t crash).

None of that applies in crop insurance.

First, it’s called crop insurance, but a more accurate name would be “farm income insurance” because more than 75% of policies actually guarantee revenue, not just yield losses. So a farmer could have a bumper crop, but if prices at harvest are lower than projected at planting, a payment will still be made.

Federal crop insurance is a three-tiered subsidy cake. Under the program farmers who buy crop insurance actually have their premiums subsidized by taxpayers. In fact, on average, farmers pay just 38% of the cost for the premiums charged by the companies, with taxpayers covering 62%. These subsidies cost taxpayers a record $12 billion in 2022.

It’s a great deal if you can get it. And some operations really do get it. The GAO found at least 19 different farm operations individually receiving more than $3 million in premium subsidies in 2022. The most egregious being a nursery and a dairy, receiving $7,700,000 and $6,600,000 in premium subsidies, respectively, in just one year. But it’s not just these mega farms benefiting from the program. Over the last 5 years, for every $1 in farmer-paid premium, the program has paid out $2.41 in claims. And it happens every year – even the last few years with near-record net farm income. Crop insurance payouts exceed farmer-paid premiums every single year. Now, some states have it worse, or is it better? Over the last five years, Texas farmers have received $4.69, Californians $3.54, and North Dakotans $3.17 for every dollar of insurance premium they’ve paid.

It’s not just farm operations. Private insurers and agents – some with parent companies in foreign countries – also rake in taxpayer subsidies to sell policies and administer the program. These administrative and operating (A&O) subsides, as they’re called, cost taxpayers $2.2 billion in 2022 alone. GAO found that subsidized insurers also earned excessive rates of return (the insurance industry’s term for company profits). Together, taxpayer subsidies for private insurers and their agents totaled nearly $4 billion in 2022 alone.

Unlike any other federal safety net program, including other farm safety net programs, crop insurance premium subsidies are opaque, unlimited, and not subject to any assets or means test. GAO has identified millionaires, billionaires, and nonfarmers receiving taxpayer subsidies, sometimes to the tune of several million dollars each year.

GAO thus recommended an array of reforms to rein in out-of-control crop insurance subsidies.

With a new farm bill on the horizon, some lawmakers have ignored GAO and called for more subsidies through a different program – government-enforced reference price subsidies, in addition to a more “affordable” crop insurance program. History tells us they’re not talking about affordability for taxpayers, but rather a select group of farmers. Expanding already egregious levels of farm subsidies and adding more to our national debt is a non-starter. The same goes for cutting nutrition benefits or effective conservation investments from the Inflation Reduction Act of 2022 to “pay for” more subsidies for private insurers and mega-farms.

As Rep. Earl Blumenauer (D-OR) said this week, “Millionaires do not need taxpayers to help them afford crop insurance.”

We couldn’t agree more. Reining in these subsidies would also help farmers and rein in our national debt.