The government chips in for an average 62 percent of the farmer's premiums, which supporters insist is different from a direct subsidy because the premiums go into a risk pool to pay for future losses.
The proposed shallow risk program would cap annual payments at $100,000 for a married couple and restricts it to farmers with adjusted gross incomes of less than $750,000. But there are no such caps on the insurance program, drawing criticism from some small government groups. The Senate bill, said Taxpayers for Common Sense, "does nothing to rein in the exploding costs of taxpayer subsidized crop insurance."
The Congressional Budget Office estimated that the government could save $1 billion a year by reducing the premium subsidy by 10 percentage points. The Government Accountability Office says it could save an additional $1 billion if individual farmer subsidies were capped at $40,000 a year.
The GAO said that in 2011 the average value of premium subsidies was $8,312 per farmer, and that one corporation that insured nursery crops in three counties in one state cost the government $2.2 million in premium subsidies and $816,000 in administrative expenses.
Agriculture Secretary Tom Vilsack has suggested lowering the premium subsidy rate, reducing insurance company returns on investment and cutting payments to farm insurance agents from $1,000 a policy to $900 to save money.
Farm groups argue that higher premiums would result in farmers insuring fewer acres and exposing taxpayers to more special disaster aid in bad times. The American Farm Bureau Federation opposes any changes in current farm bill payment limitations and means-testing provisions.
"Simply stated, payment limits bite hardest when commodity prices are lowest," the federation's president, Bob Stallman, said at a recent House hearing.
- Dave Ramsey says: Don't leave an estate with...
- Renewable energy advocates decry proposed...
- Battered by recalls, GM buoyed by its large SUVs
- Balancing act: Survey says lack of balance,...
- Z'Tejas closing after 13 years at The Gateway
- The Gateway adding new dining concept
- Does getting married really increase wealth...
- Protesters from across U.S. arrested at Utah...
- Renewable energy advocates decry... 15
- Protesters from across U.S. arrested at... 13
- Obama gives protection to gay,... 7
- New solar energy project at Utah... 6
- Dave Ramsey says: Don't leave an estate... 5
- Parks visitors spent $596M in Utah last... 5
- Balancing act: Survey says lack of... 4
- Beef pollutes more than pork, poultry,... 2