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The Farm Bureau’s Billions: The Voice of Farmers or Agribusiness?

The Farm Bureau’s Billions: The Voice of Farmers or Agribusiness?

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Calling itself the “voice of agriculture” and promoting itself as a tireless defender of farmers, the American Farm Bureau Federation has successfully positioned itself as one of the most powerful interest groups in the United States. A cursory look beyond its pro-farmer public relations campaign, however, reveals billions of dollars in assets, close alliances with the insurance industry, and legions of lobbyists — making it difficult to view the Farm Bureau in a different light from the powerful agribusiness corporations with which it regularly partners.
Calling itself the “voice of agriculture” and promoting itself as a tireless defender of farmers, the American Farm Bureau Federation has successfully positioned itself as one of the most powerful interest groups in the United States. A cursory look beyond its pro-farmer public relations campaign, however, reveals billions of dollars in assets, close alliances with the insurance industry, and legions of lobbyists — making it difficult to view the Farm Bureau in a different light from the powerful agribusiness corporations with which it regularly partners.

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Published by: Food and Water Watch on Aug 09, 2010
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01/18/2011

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The Farm Bureau’s Billions:
The Voice of Farmers or Agribusiness?
Far away from America’s farms, elds and ranches, theFarm Bureau exes its nancial and political might instatehouses, courthouses and the halls of Congress, shapingeverything from civil rights legislation to health insuranceto agricultural policy.
4
Sometimes advocating positionsthat actually hurt farmers or on issues which don’t concernthem at all, the Farm Bureau appears to use farmers in oneof two ways: as a source of revenue or a front to advancethe organization’s political agenda and nancial portfolio.What is indisputable is the Farm Bureau’s sprawling,billion-dollar collection of interlocking non-prot organi-zations and high-stakes insurance companies. In the ninedecades it has been in operation, the number of farms inthe United States has dropped from a peak of 7 million to 2million while the Farm Bureau has amassed a fortune thatwould stir the envy of many corporations, its deep cofferscementing its political inuence.
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How the Farm Bureau is able to maintain its non-protstatus with such vast nancial reserves and close ties to theinsurance industry is a question that deserves fresh review.
The Farm Bureau’s Financial Empire
The Farm Bureau’s immense nances drive its politicalpower. With its nearly 3,000 afliated state and county-level non-prot farm bureaus, the combined organizationmaintains billions of dollars in assets, making it among themost monied non-prot organizations in the United States.
6
 
Meanwhile, the Farm Bureau’s afliated for-prot com-panies, many of them in insurance, maintain assets on awhole other order. While the Farm Bureau tries to maintainan image of ghting for the little guy, its afliates invest tensof millions of dollars into corporate agribusiness — Car-gill, ConAgra, Dow Chemical, DuPont, Tyson and ArcherDaniel Midlands.
7
While the vast majority of the Farm Bureau network’s rev-enues seem to come from non-agricultural enterprises, asdescribed below, most of the organization’s contact withfarmers occurs through a vendor-client relationship. In someparts of the country, Farm Bureau afliates even act as verti-cally integrated one-stop shops for farmers, selling everythingfrom tires to genetically modied seed to crop insurance.
C
alling itself the “voice of agriculture”
1
and promoting itself as a tireless defenderof farmers, the American Farm Bureau Federation has successfully positioneditself as one of the most powerful interest groups in the United States.
2
A cursory
look beyond its pro-farmer public relations campaign, however, reveals billions of dollars in assets, close alliances with the insurance industry, and legions of lobbyists
3
 
— making it difcult to view the Farm Bureau in a different light from the powerfulagribusiness corporations with which it regularly partners.
FOOD
 
Crop Insurance
Part of a $7 billion government-backed program, cropinsurance is a small but not insignicant part of the FarmBureau’s nancial network, which reported underwriting atleast $300 million in crop insurance premiums in 2008.
8
 
Insurers garnered $1.6 billion in administrative fees in2009 from the federal government, a giveaway from theUnited States Department of Agriculture (USDA), whichalso paid out $5 billion to subsidize the premiums thatfarmers pay insurers.
9
While it is unclear how much of thisgovernment money the Farm Bureau or its afliates earned,a single one of its afliates reported receiving $34 millionin 2008.
10
 
While crop insurance does serve a potentially benecialrole to farmers, it is not clear if the Farm Bureau has farm-ers’ interests in mind. Western Agricultural Insurance Com-pany, a Farm Bureau Afliate, teamed up with corporatebiotech giant Monsanto to submit a proposal to the USDAthat created a discount crop insurance plan for growers of Monsanto’s triple-stack genetically modied (GM) crops,claiming that these crops were less risky than other (non-GM) crops.
11
Now in place, the program gives farmers anestimated 13% reduction in insurance costs — in effectsubsidizing Monsanto’s costly trait-endowed seed, whichis signicantly more expensive than non-GM seed.
12
In asmuch as the Farm Bureau will say this program helps farm-ers, it probably helped its own business interests — andthose of its corporate ally Monsanto — far more.At a 2009 House Agriculture hearing on crop insurance,both the president of the American Farm Bureau Federa-tion and a member from the Louisiana Farm Bureau testi-ed, advocating for increased support of the governmentsubsidized program.
13
Interestingly, the president of theAmerican Farm Bureau Federation, Bob Stallman, is alsothe president and Chairman of the Board of the Ameri-can Agricultural Insurance Group, a Farm Bureau afliatewhich has a $134 million dollar stake in crop insurance.
14
 
Stallman’s two positions — advocating on behalf of farmersfor expanded crop insurance while serving as the presidentof a for-prot company that would benet nancially fromsuch an expansion — give every appearance of a conictof interest.
Non-Agricultural Insurance
Farm Bureau afliates’ interest in crop insurance, however,is a very small drop in their multi-billion dollar bucket of afliated insurance and nancial companies. The IowaFarm Bureau and other Farm Bureau organizations owna 69.1 percent voting interest in FBL Financial group, aprivate business entity whose banking and insurance reachincludes more than $14 billion in assets, generating closeto $650 million in income in 2007.
15
FBL Financial, inturn, leverages its relationship with the Farm Bureau to tapits member roster for clients.
16
 
The Illinois Farm Bureau, called the Illinois AgriculturalAssociation (IAA),
17
is another nancial powerhouse. Likeother state and county-level Farm Bureaus, the IAA is anon-prot organization, but it maintains around a billiondollars in assets.
18
The IAA’s afliated companies includethe Country brand of insurance, which has more than $10billion in assets.
19
 
The non-prot Missouri Farm Bureau reports more than$600 million in assets through its subsidiary insurancecompanies
20
while the Kansas Farm Bureau has closeto $100 million in assets with tens of millions of dollarsinvested in its afliated companies.
21
The Alabama FarmBureau and the insurance giant ALFA maintain a very closerelationship, with millions of dollars passing between theentities every year.
22
ALFA insurance is headquartered inthe Alabama Farm Bureau’s ofces, and the two entitieskeep the same president, who earned more than $7 millionin 2008.
23
Nationwide, an insurance and nancial giant based inColumbus, Ohio, was started by the Ohio Farm Bureaudecades ago, and the two entities maintain a close rela-tionship. The company reported revenues of more than$4.5 billion and assets exceeding $119 billion in 2007, the
While the Farm Bureau tries to
maintain an image of ghting for the little guy, its afliates invest 
tens of millions of dollars intocorporate agribusinesses.
 
last year in which it led U.S. Security and Exchange Com-mission documents as a public company.
24
Nine of its 15directors are associated with the Farm Bureau, six havingserved in executive positions for the Ohio Farm Bureau orthe American Farm Bureau Federation.
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Nationwide is stillovercoming the public relations nightmare that followeda $13 million settlement with the Department of Justice,which charged the company with discriminating againstminorities in its insurance operations.
26
Farmer Cooperatives
Amazingly, the behemoth Farm Bureau maintains thesevast riches and wide investments in the insurance industrywhile also claiming non-prot status — a subject that hasbeen scrutinized by Congress and the Internal RevenueService.
27
 
The Farm Bureau also takes advantage of tax law with itsparticipation in farmer cooperatives. Growmark, a $6 bil-lion cooperative with far-ranging business interests in theMidwest, was started by Farm Bureau members, and manyGrowmark board members are Farm Bureau members orinvolved with Farm Bureau afliates.
28
Only Farm Bureaumembers are eligible to receive patronage funds — prof-its that are redistributed back to farmer-members of thecooperative.
29
 
Growmark is headquartered at the Illinois Farm Bureau,
30
 
and the two organizations have joint-venture providingcrop insurance to farmers.
31
Growmark is involved in oilrening and distribution, gas stations and grain elevators,and it has expansive ties to corporate agribusiness, in-cluding selling seeds endowed with Monsanto’s patentedRound-Up Ready traits under its own brand, FS seeds.
32
Ithas formed alliances with Novartis Seeds, Land O’Lakesand Syngenta,
 
and in 1985, the cooperative consolidatedits grain terminals and merchandising operations withArcher Daniel Midlands (ADM).
33
For more than a decade,the president of Growmark was a member of the Board of Directors of ADM.
34
Buying Inuence
With coffers that would stir the envy of many corporations,the Farm Bureau has nancial clout that commands atten-tion on Capitol Hill and in statehouses around the country.The American Farm Bureau Federation, the parent orga-nization of nearly 3,000 state and county-level bureaus,has been the largest or second-largest lobbyist from theagricultural sector the last ve years, putting as much as$8 million a year toward inuencing legislation — in someyears single-handedly representing close to a third of allmoney spent on lobbying from agriculture.
35
In the last veyears, the Farm Bureau (neck and neck with Monsanto) hasconsistently ranked as the highest or second-highest spend-ing lobbyist from the agriculture industry, shelling out tensof millions of dollars and employing hundreds of lobbyiststo inuence legislation.
36
In addition to the millions it spends lobbying on specicpolicies, the Farm Bureau chips in millions of dollars in fed-eral and state campaign contributions, giving $3.6 millionin the 2007-2008 campaign cycle, the vast majority of it onthe state level and to the Republican party.
37
Between 2005and June 2010, the Farm Bureau contributed between twoand three times as much money to Republicans as they didto Democrats;
38
it is not surprising that the Farm Bureau’spolitical agenda frequently aligns with conservatives.The Farm Bureau also raises huge sums of money to inu-ence ballot issues, as it did in Ohio in 2009. In a matter of two months, the Farm Bureau was able to raise more than$1.3 million from its national, state and county-level farmbureau afliates to help pass a ballot issue in Ohio thattransferred oversight of animal agriculture, including large-scale factory farms, from government agencies to a politi-cally appointed board, on which Farm Bureau afliateswould eventually sit.
39
This radical change to Ohio’s con-stitution was also supported by Monsanto, Syngenta and ahost of industry groups representing corporate agriculture,which raised a combined $5 million, ooding the airwavesand TV channels with advertising to inuence voters.
40
Two
positions on the politically appointed board were designat-ed for members of “statewide farming organizations,” andfollowing the victory, the governor appointed at least twoboard members with ties to the Farm Bureau.
41
Representing Farmers?
The Farm Bureau regularly claims to speak on behalf of farmers — especially to the media and to Congress — andfrequently cites its 6.2 million “member families” or itsrole as it the
nation’s largest and most inuential gen-

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