Farm Bureau Exposed

by Bernie Fischlowitz-Roberts,Researcher, CFHIA

Executive Summary

Ignoring the Science: Opposition to Logical Clean Water Protections

Insurance Company or Right-Wing Supergroup? Support for Discrimination and Dirty Water

Big Business vs. Family Farms: Standing up for Big Insurance

Follow the Money: Investing in Corporate America, Not the Family Farm

Making Them Squeal: Big Money, Big Donors & Right-Wing Political Giving

Coming Straight from Wall Street: “Heads I Win, Tails You Lose”

For additional information visit www.farmbureauexposed.com.

Farm Bureau Exposedby Bernie Fischlowitz-Roberts

Citizens for a Healthy Iowa (CFHIA)November 26, 2014.

“Farm Bureau Exposed,” by Bernie Fischlowitz-Roberts. Funded by Citizens for a Healthy Iowa (CFHIA). Avail-able under a Creative Commons Attribution 3.0 United States license. Permission to share and distribute - At-tribution required credit be given to copyright holder and author. Copyright and license notices be kept intact.

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The Iowa Farm Bureau would have you believe that they are the heart of Iowa - that they represent all that is good about our state. This report seeks to expose the true heart of the Iowa Farm Bureau. The heart that is focused on extracting as much profit as possible via sales of insurance and other financial products. The heart that lobbies heavily to increase government subsidies of destructive farming practices while opposing sensible protections for our air and water. And the heart that uses high-dollar influence peddling to shape a right-wing agenda that has little to do with what makes Iowa a great place to live, work and raise a family.

The Farm Bureau has a strong brand with high name recognition and unparalleled political influence. Its views on a range of controversial political issues are far outside the mainstream, and promote a right-wing agenda. While a non-profit organization, the Farm Bureau has deep ties to lucrative for-profit insurance companies, and the policies they espouse often benefit these business interests. The Farm Bureau’s policy positions demonstrate a strong belief in the privatization of profit and the socialization of risk. That is, agriculture and other industries should be incentivized or otherwise compensated by taxpayers when providing benefits to the public, but should not be penalized when imposing costs on the public through pollution or other negative externalities. This ideology is the epitome of a “heads I win, tails you lose” approach to public policy on behalf of large, powerful and profitable companies, at the expense of ordinary citizens, family farmers, public health, and environmental protection. On a range of issues, the Farm Bureau suggests that agriculture should be exempt from most regulations, that voluntary measures are always preferable to

standards or mandates with the force of law, and that any regulatory authority should rest with states and localities, rather than the federal government. Its past support for repealing the Voting Rights Act of 1965, and current support for voter ID laws that disenfranchise poor and minority voters, illustrate an organization intent on depriving certain Americans of their constitutional rights. The Farm Bureau also wants to make it easier for polluters to break the law and get away with it, by deleting provisions from environmental statutes allowing citizens to sue the government to force compliance with the law. Analysis of publicly available data show the Farm Bureau earns most of its income not from membership dues or publications, but from its investments in a web of interrelated insurance companies. Those insurance companies invest tens of millions of dollars in large agribusiness conglomerates, so it’s no surprise that the Farm Bureau’s agriculture policies benefit large agribusiness interests much more than family farmers. Like its national counterpart, the Iowa Farm Bureau has tremendous financial clout and uses its financial resources to influence the political process. IFB employs six lobbyists in Des Moines, and over the last four years has contributed over $550,000 to political candidates in Iowa, giving almost eight times as much to Republican candidates as to Democratic ones. Its strong support for Republican candidates and Republican policies further demonstrates that the organization is an influential mouthpiece for a right-wing corporate agenda that has nothing to do with small farmers but everything to do with enriching its own businesses, and the businesses in which they invest.

executive summary

executive summary

For additional information visit www.farmbureauexposed.com.

7Ignoring the Science: Opposition to Logical Clean Water Protections

Ignoring the Science: Opposition to Logical Clean Water Protections

Iowa Farm Bureau:Voice of Agriculture Hypocrisy and Big BusinessThe Farm Bureau has a strong brand with high name recognition, and unparalleled political influence. It calls itself the “voice of agriculture,” yet manypeople are unaware of what the organization stands for, what a lucrative business empire it has built, and the many connections between the non-profit organization and its numerous for-profit businesses. Its views on a range of controversial political issues are far outside the mainstream, and support a right-wing agenda that benefits large corporate interests at the expense of ordinary citizens, small family farmers, public health, and environmental protection. Few things are more essential to a democratic society than the importance of an informed electorate. The information that follows is intended to inform citizens about an organization that plays an outsize role in the political process in Iowa and across the nation, with an array of negative consequences.

While the Farm Bureau frequently claims that decisions should be based on “sound, scientific principles and peer-reviewed science,” it is clear that this is coded language. Even when scientific evidence is overwhelming, and when the benefits of laws and regulations exceed the costs by tremendous amounts, the organization still opposes those measures. The EPA’s proposed Waters of the U.S. rule, which aims to provide clarity around Clean Water Act protections for waterways, is one example. The main idea behind the rule is simple: to have clean water downstream, it’s important to prevent discharge of pollution upstream. EPA’s Scientific Advisory Board noted, “the available science supports the conclusion that the types of water bodies identified as waters of the United States in the proposed rule exert strong influence on the physical, chemical, and biological integrity of downstream waters.”1 The rule will have estimated annual benefits of $388 million to $514 million, in the form of reduced flooding, pollution filtering, providing wildlife habitat, and recharging groundwater, far exceeding annual costs of $162 million to $278 million for mitigating impacts to wetlands and streams, and reducing

pollution to waterways.2 Yet the Farm Bureau has been vocal in its opposition to this common sense protection for clean water. And this is not an isolated example.

On a range of issues, the Farm Bureau suggests that agriculture should be exempt from most regulations, that voluntary measures are always preferable to standards or mandates with the force of law, and that any regulatory authority that does exist should rest with states and localities, rather than the federal government. To see the limits of the voluntary approach, Iowans need look no farther than Des Moines Water Works, the public drinking water utility for 500,000 people. Its general manager noted that September 2014 was the first September in at least 40 years that average nitrate levels (from fertilizer runoff from corn and soybean farming operations) in the Raccoon River exceeded the EPA drinking water standard, suggesting that record “is part of an ominous trend and should trigger a serious reassessment of voluntary environmental protection measures for industrial agriculture.”3

The Waters of the U.S. rule will have estimated annual benefits of $388 million to $514 million, in the form of reduced flooding, pollution filtering, providing wildlife habitat, and recharging groundwater, far exceeding annual costs of $162 million to $278 million for mitigating impacts to wetlands and streams, and reducing pollution to waterways. Yet the Farm Bureau has been vocal in its opposition to this common sense protection for clean water. And this is not an isolated example.

$162 - $278M I L L I O NEXPENDITURES

$388 - $514M I L L I O N

BENEFITS1. Science Advisory Board (SAB) Consideration of the Adequacy of the Scientific and Technical Basis of the EPA’s Proposed Rule titled“Definition of Waters of the United States under the Clean Water Act,” 30 September 2014. http://yosemite.epa.gov/sab/sabproduct.nsf/WebReportsLastMonthBOARD/518D4909D94CB6E585257D6300767DD6/$File/EPA-SAB-14-007+unsigned.pdf accessed 23 October 2014.2. U.S. Environmental Protection Agency & U.S. Army Corps of Engineers, “Economic Analysis of Proposed Revised Definition of Waters of the UnitedStates,” March 2014, http://www2.epa.gov/sites/production/files/2014-03/documents/wus_proposed_rule_economic_analysis.pdf accessed 23 October 2014.3. William G. Stowe, Letter to the Editor, Des Moines Register, 25 October 2014, http://www.desmoinesregister.com/story/opinion/readers/2014/10/26/water-quality-falling-treatment-costs-rising/17908319/ accessed 26 October 2014.

9Insurance Company or Right-Wing Supergroup? Support for Discrimination and Dirty Water

Insurance Company or Right-Wing Supergroup? Support for Discrimination and Dirty Water

The policies the Farm Bureau espouses go far be-yond agriculture issues, and show them to be an extreme right-wing organization intent on depriving certain Americans of their constitutional rights. For many years, the organization supported repeal of the Voting Rights Act of 19654, a landmark law protecting the voting rights of African-Americans, and an es-sential embodiment of Constitutionally-guaranteed freedoms which the organization otherwise claims to support. In 1997, in another instance of reflexive op-position to anything that could be construed as fed-eral government involvement in local affairs, the Farm Bureau opposed legislation designed to remedy a history of USDA discriminating against minority farm-ers, simply because the bill would have allowed the Secretary of Agriculture to appoint people to county committees, to insure that federal non-discrimination laws were being followed.5 Today, the organization’s effort to disenfranchise poor and minority voters takes the form of supporting voter ID laws.6 The Farm Bureau also wants to make it easier for polluters to break the law and get away with it, by deleting provi-sions from environmental statutes allowing citizens to sue the government to force compliance with the law, and reducing funding for the EPA.7

From its standpoint, farmers should be provided economic incentives to act in the public interest. For example, “conservation and environmental programs should provide cost share, tax credits or be based on other positive economic incentives; or provide compensation when an individual’s use of property is restricted for the benefit of the public.”8 Yet the organization’s policy book is replete with preferences for voluntary actions rather than mandates or regu-lations with the force of law, opposing penalties for non-compliance, and preventing actions that would hold farmers and others accountable for externalizing costs onto others. The organization asserts, “Nor-mal agricultural practices…should be exempt from environmental regulations.”9 The Bureau opposes a litany of specific environmental measures to prevent pollution: including agricultural sources of particulate matter in national air quality standards, regulating greenhouse gas (GHG) emissions from agriculture (including regulating methane from livestock under the Clean Air Act), any carbon taxes or legislation requiring cap-and-trade systems, and even requiring reporting of GHG emissions by an agriculture entity.10

4. Mike Wallace, “The Farm Bureau’s Big Business,” 60 Minutes, April 9, 2000.5. Statement of the American Farm Bureau Federation. Hearing on Civil Rights Legislation and Other Issues. Committee on Agriculture. US House of Representatives. October 23, 1997. http://commdocs.house.gov/committees/ag/hagCivil.000/hagCivil_0f.htm accessed 28 October 2014.6. Farm Bureau Policies for 2014 (San Antonio, TX: January 2014), downloaded from http://www.texasfarmbureau.org/PolicyBook/2014AFBFPolicyBook.pdf, 2.7. Ibid, 173.8. Ibid, 66.9. Ibid, 173.10. Ibid, 170-172.

11Big Business vs. Family Farms: Standing up for Big Insurance

Big Business vs. Family Farms: Standing up for Big Insurance

The Bureau’s farm policy is also characterized by sig-nificant conflicts of interest. The organization declares that reliance on government should be reduced in fa-vor of the market, including “providing more options for insurance and revenue assurance products that are more equitable for all commodities in all produc-tion regions of the country against adverse market fluctuations and weather-related hazards.”11 Yet the American Farm Bureau Federation is connected to FBL Financial, a massive for-profit insurance company with assets of $8.46 billion that sells crop insurance12; reductions in direct payments to farmers in favor of federally subsidized crop insurance benefits FBL’s bottom line. In fact, Iowa Farm Bureau owns a 64 percent share of FBL Financial.13 In this instance, as in many others, the organization’s views about public

policy are less about what benefits farmers and more about what benefits their insurance companies. FBL Financial admits as much in documents they file with the Securities and Exchange Commission: “Our business and operations are interrelated to a degree with that of the American Farm Bureau Federation, its affiliates, and state Farm Bureau organizations. The overlap of the business, including service of cer-tain common executive officers and directors of the Company and the state Farm Bureau organizations, may give rise to conflicts of interest among these parties.”14

11. Ibid, 70-71.12. FBL Financial Group, IRS Form 10-K, 2013, Part II, Item 6, Selected Consolidated Financial Data.13. Iowa Farm Bureau, IRS Form 990, 2011, Schedule R, Part IV.14. FBL Financial Group, IRS Form 10-K, 2013, Part I, Item 1A. Risk Factors.

13Follow the Money: Investing in Corporate America, Not the Family Farm

Follow the Money: Investing in Corporate America, Not the Family Farm

The intertwined nature of the American Farm Bureau Federation with state and county farm bureau orga-nizations and related insurance companies includes officers and directors who are shared between orga-nizations, and individuals who hold multiple roles in related organizations. Illustrative of this trend is the biography of current president, Craig Hill:

CRAIG HILL SERVES ON THE BOARD OF DIRECTORS FOR FARM BUREAU MUTUAL HOLDING COMPANY AND IS CHAIRMAN OF THE BOARD AND CHAIR OF THE EXECUTIVE COMMITTEE FOR FBL FINANCIAL GROUP, INC. HE IS PRESIDENT OF THE IOWA FARM BUREAU FEDERATION AND DIRECTOR AND PRESI-DENT OF ITS SUBSIDIARY, FARM BUREAU MANAGE-MENT CORPORATION. IN 2012, HILL WAS ELECTED TO THE BOARD OF DIRECTORS OF THE AMERICAN FARM BUREAU FEDERATION. HE IS ALSO A DIREC-

TOR AND PRESIDENT OF FARM BUREAU LIFE INSUR-ANCE COMPANY.15

Though it calls itself the “voice of agriculture,” its membership base is composed primarily of holders of insurance policies issued by affiliated insurance companies, rather than farmers. (There are about 2.1 million farms in the U.S., and the Farm Bureau claims a membership of over six million.16) Clearly a minority of members are farmers, and in many cases, people who hold an insurance policy with any Farm

Bureau-related companies are counted as members of the organization. As 60 Minutes made clear over a decade ago, some insurance policy holders are un-aware that they’re considered members of the Farm Bureau, and have no idea that the organization uses their membership as a means of advocating for policy positions that they do not support.17

On its 2011 Form 990, which was submitted to the IRS

in 2013 and represents the most recent publicly avail-able data, Iowa Farm Bureau Federation listed net assets of $769 million. In the 2011-12 tax year, the or-ganization spent $1.6 million on conferences, conven-tions and meetings, and $835,000 on travel expenses. Among the IFB’s investments are holdings of over $500 million in FBL Financial stock.18 IFB earned $3.27 million from membership dues and assessments, and almost $4.5 million from publication revenue; during the same time period, the organization had over $23 million in investment income.19 So it is clear that the bulk of its revenue is derived from investments from proceeds of its large insurance businesses.

The Farm Bureau’s agriculture policy benefits large agribusiness operations much more than family farmers. For instance, the organization is opposed to means testing for subsidies to farmers, as well as pay-ment limitations.20 These approaches benefit the larg-

est agribusiness operations and wealthiest farmers to a much greater extent than average family farmers. And the deployment of its substantial organizational assets reinforces that affinity for large corporations that destroy family farms, as the organization invests tens of millions of dollars with large agribusiness con-glomerates including ADM, Cargill, ConAgra, Dow, DuPont, and Tyson.21

6.32.1MILLIONFARMS

MILLIONMEMBERS

SO IT IS CLEAR THAT THE BULK OF ITS REVENUE IS DERIVED FROM INVESTMENTS FROM PROCEEDS OF ITS LARGE INSURANCE BUSINESSES.

$769MILLION NET ASSETS

$500 MILLIONFBL FINANCIAL STOCK

$4.5 MILLIONPUBLICATION

REVENUE

$23 MILLIONINVESTMENT

INCOME

PROFILE OF THE IOWA FARM BUREAUFEDERATION’S ASSETS & EXPENSES

15. Farm Bureau Mutual Holding Company, 2013 Annual Report, 5.16. U.S. Department of Agriculture, 2012 Agriculture Census, Volume 1, Chapter 1, Table 1, http://www.agcensus.usda.gov/Publications/2012/Full_Re-port/Volume_1,_Chapter_1_US/st99_1_001_001.pdf accessed 24 October 2014. American Farm Bureau Federation, “Farm Bureau Celebrates 50 Years of Membership Growth,” press release, December 7, 2010, http://www.fb.org/index.php?action=newsroom.news&year=2010&file=nr1207.html accessed 20 October 2014.17. Mike Wallace, “The Farm Bureau’s Big Business,” 60 Minutes, April 9, 2000.18. Iowa Farm Bureau, IRS Form 990, 2011, Schedule D, Part VII.19. Iowa Farm Bureau, IRS Form 990, 2011, Schedule D, Part VIII.20. Farm Bureau Policies for 2014, 71-72.21. Food and Water Watch, “The Farm Bureau’s Billions: The Voice of Farmers or Agribusiness?” July 2010, downloaded from http://documents.foodan-dwaterwatch.org/doc/FarmBureauLR.pdf, 1.

15Making Them Squeal: Big Money, Big Donors & Right-Wing Political Giving

Making Them Squeal: Big Money, Big Donors & Right-Wing Political Giving

The Farm Bureau is not shy about spending sig-nificant amounts of money in support of its politi-cal agenda, which makes the organization a major player in the realm of campaign finance. As a re-sult, the Farm Bureau holds immense influence in Washington, D.C., and in state capitals. American Farm Bureau Federation has 22 registered federal lobbyists in its public policy department, and at least 20 state farm bureaus have additional reg-istered lobbyists in Washington, D.C. During the 2002-2012 time period, the Farm Bureau donated $16 million to federal Congressional candidates, which represents almost half of total contribu-tions from the largest ten agribusiness interests in the nation. Farm Bureau donated another $16 million to state candidates during that period.22 The Iowa Farm Bureau employs six registered lobbyists to weigh in on state legislative matters in Des Moines; no other organization in the state employs more registered lobbyists than the Iowa Farm Bureau.23

Over the last four years, the magnitude and the partisan breakdown of Iowa Farm Bureau dona-tions to political candidates tells a compelling story. Iowa Farm Bureau political action com-mittees (PACs) contributed just over $63,000 to Democratic candidates, while donating almost $494,000--more than seven times as much--to Republican candidates.24 Given the Farm Bureau’s knee-jerk opposition to almost any regulations on agriculture or other business operations, its strong support for Republican candidates and Republican policies further demonstrates that the organization is an influential mouthpiece for a right-wing corporate agenda that has nothing to do with small farmers, but everything to do with enriching its own businesses, and the businesses in which it invests.

22. Ian Shearn, “Whose Side is the American Farm Bureau On?” The Nation, July 16, 2012, http://www.thenation.com/article/168913/whose-side-ameri-can-farm-bureau accessed 25 October 2014.23. Iowa State Legislature, Lobbyists Registered (2014 session), http://coolice.legis.iowa.gov/Cool-ICE/default.asp?Category=Matt&Service=Lobby&-frame=5 accessed 29 October 2014.24. Citizens for a Healthy Iowa analysis of data from Iowa Ethics & Campaign Disclosure Board, https://webapp.iecdb.iowa.gov/publicview/NewContri-butionSearch.aspx accessed 27 October 2014.

17Coming Straight from Wall Street: “Heads I Win, Tails You Lose”

Coming Straight from Wall Street: “Heads I Win, Tails You Lose”

Much like the Wall Street banks that took advantage of Americans and contributed to the financial crisis of 2008, the Farm Bureau’s policy positions demon-strate a strong belief in the privatization of profit and the socialization of risk. That is, agriculture and other industries should be incentivized or otherwise com-pensated by taxpayers when providing benefits to the public, but should not be penalized when imposing costs on the public through pollution or other neg-ative externalities. This ideology is the epitome of a “heads I win, tails you lose” approach to public policy on behalf of large, powerful and profitable compa-nies, at the expense of ordinary citizens, small family farmers, public health, and environmental protection.

For additional information visit www.farmbureauexposed.com.