The federally subsidized crop insurance program, the costliest part of the U.S. farm safety net, would spin off at least three new types of coverage and could cost 10% more under draft farm bills pending in the U.S. House of Representatives and Senate.
Members of the Senate and House Agriculture committees are scheduled to debate their respective bills next week. According to Reuters, both of the five-year farm bills would cost roughly $500 billion, the bulk of it to be spent on food stamps for the poor.
Overall, the government safety net for farmers is shrinking, House Agriculture Committee staff said in a briefing on Friday. Traditional crop subsidies in the House bill would be slashed by $22 billion over 10 years, or 34%, while crop insurance funding would go up by $11 billion, they said, based on unofficial figures.
Crop insurance was projected by the Congressional Budget Office to cost about $9 billion a year before any changes ordered by the farm bill. Costs could rise by 10% under the figures cited by House staff workers. The Senate farm bill was projected last year to increase crop insurance by 5%.
As part of crop insurance, the government pays 62 cents of each $1 in premiums, pays part of overhead costs for insurers and shares in the loss in bad years. Insurers are required to offer policies to all farmers, Reuters reports.
A House Agriculture Committee spokeswoman said the insurance system would be more efficient and market-oriented under the provisions of the farm bill. Farmers pay for coverage and get a payment only after substantial losses, she said.