Senate, House Bills Propose Crop Insurance Cutbacks

Companion bills lower taxpayer portion of crop insurance premiums

Published on: Mar 11, 2013

Sen. Jeff Flake, R-Ariz., and Rep. John Duncan, R-Tenn., Tuesday introduced companion bills that would alter the federal crop insurance program by returning crop insurance subsidies to pre-Agriculture Risk Protection Act levels, lowering taxpayer portion of insurance premiums from 62% to 37%.

According to Congressional Budget Office estimates, the bill, Crop Insurance Subsidy Reduction Act of 2013, would save taxpayers more than $40 billion over the next ten years.

Rep. Duncan and Sen. Flake say the bill would "restore the program's fiscal integrity" while ensuring that farmers are protected by an effective safety net.

"The crop insurance program has turned into a huge taxpayer-funded boon for some of the biggest, multi-national insurance companies and multi-millionaire corporate farmers," Rep. Duncan said in a press statement. "In a time of record deficits and an incomprehensible $16.5 trillion in debt, this program can no longer be justified in its current form."

Companion bills lower taxpayer portion of crop insurance premiums
Companion bills lower taxpayer portion of crop insurance premiums

Sen. Flake said similarly that the current fiscal crisis proposes strong cause for a roll back of crop insurance subsidies.

He said the bill "offers an opportunity to have taxpayer-funded federal farm subsidies more realistically reflect our current fiscal situation."

Taxpayers spent $7.1 billion in 2012 on federal crop and revenue insurance premium subsidies, according to the USDA. The legislators say even in years when the federal government takes in more in premiums than it dispenses in claims, a net loss still results because of the amount spent on crop insurance subsidies.

The bill is supported by several taxpayer and reform groups, and the Environmental Working Group.

EWG has lobbied for crop insurance cutbacks, an issue the National Crop Insurance Services recently tackled in a video published on Feb. 27.

NCIS says EWG accused farmers of "praying for the drought," which Milford, Ill., farmer Marvin Andris, during the NCIS video responded, "They obviously haven't brushed shoulders with any farmer. I'll guarantee there's not a farmer that I know of that is into [farming] so they can collect crop insurance. We're into this because we want to raise crops."