Agricultural News
Senator Tom Coburn Proposes Cap on Crop Insurance Premium Subsidies
Thu, 03 Apr 2014 11:21:25 CDT
The attacks on Crop Insurance have resumed, just over two months after the Agricultural Act of 2014 was concluded by Farm Bill Conference that was led by House Ag Committee Chairman Frank Lucas. On Wednesday, two US Senators, including Oklahoma Senator Tom Coburn, proposed cuts in Crop Insurance by imposing a cap in crop insurance premium subsidies, hoping for a billion dollars in savings over a ten year period.
Senators Jeanne Shaheen, D-N.H. and Tom Coburn, M.D., R-Okla., introduced legislation that would cap crop insurance premium subsidies at $70,000 per farm each year. The Senators contend that this cap would impact less than 1.3 percent of producers, according to a 2011 Government Accountability Office report. The Congressional Budget Office estimates that if the crop insurance program continues at the current rate without reform, it will cost taxpayers more than $90 billion over the next 10 years.report.
"Crop insurance premium subsidies should go to those who need assistance rather than those who don't," said Senator Coburn, who has previously co-sponsored legislation with Sen. Dick Durbin, D-Ill, to apply means testing on crop insurance purchasers. "The way to address trillion dollar deficits is one billion - or million - dollars at a time. This reform takes us $1 billion in the right direction by ensuring that the wealthiest farm operations are not receiving unnecessarily large federal subsidies."
Oklahoma producers purchased 41,084 crop and livestock policies in 2013, covering almost 7.3 million acres. In contrast, the home state of Senator Shaheen, New Hampshire saw their farmers purchased only 92 policies covering about 9,000 acres- based on statistics from the USDA's Risk Management Agency
One group that is pleased with the proposal is the Environmental Working Group.
"We welcome this much-needed reform legislation," said Craig Cox, EWG's senior vice president of agriculture and natural resources. "Congress missed an opportunity during the renewal of the last farm bill to fix the flawed crop insurance program by putting some limit on the amount of subsidies that farm operations can get to lower the cost of their insurance policies. The largest and most financially secure farm businesses harvest most of those subsidies, and this bill is a good start toward leveling the playing field."
Under current law, there is no limit on premium support. As a result, 26 policy holders received more than $1 million apiece in taxpayer-funded crop insurance subsidies in 2011, and more than 10,000 policyholders received more than $100,000 each, EWG's research showed.
"For years, Congress has limited the amount of traditional farm subsidies a producer can receive," said Cox. "It just makes sense to put similar limits on the much larger subsidies that lower crop policy premiums."
WebReadyTM Powered by WireReady® NSI
Top Agricultural News
More Headlines...
