Senators Consider Cuts in Crop Insurance
The Senate is debating cuts to the federally subsidized crop insurance program as it considers a massive farm bill this week. The Obama administration said it wants to see more cuts to crop insurance and farm subsidies in the legislation, which would cost almost $100 billion a year over five years and would set policy for farm programs and food aid.
The bill would cut about $2.4 billion annually from overall farm spending, reports the Associated Press. But it would still expand federally subsidized crop insurance and raise some subsidies for rice and peanut farmers. The White House did not specify how large a cut it was seeking.
Almost $80 billion of the annual cost of the bill is for domestic food aid, with most of the rest of the money split between farm subsidies, federal help for crop insurance and programs to protect environmentally sensitive land.
The government spent an estimated $15.8 billion on the program for the 2012 crop year after a drought destroyed many crops, up from $9.4 billion in 2011. The government subsidizes about 62% of farmers’ insurance premiums and also subsidizes the insurance companies that sell the policies. The cost of the program has risen in recent years because of bad weather events and record-high crop prices, reports the AP.
The Senate began debating the bill Monday, with Senate Agriculture Committee Chairwoman Debbie Stabenow, D-MI, saying she expected several amendments to be offered on the crop insurance program. Stabenow and other farm-state senators have argued that crop insurance should be maintained and even expanded because it protects farmers when they need it most and because farmers contribute some of their own money to the program.