Crop-insurance cuts test farm power
By Bloomberg News
WASHINGTON — Rural groups say they’ll fight a proposed $100 million-a-year cut in crop insurance subsidies, a measure that has won the support of both houses of Congress and could be a test of agriculture’s influence in Washington.
The House has endorsed reducing the government’s portion of farmers’ insurance-policy premiums for higher-income farmers, following a Senate measure approved in June. Critics of what’s become the largest U.S. farm-aid program say the measure doesn’t go far enough, while supporters warn of ripple effects through the rural economy.
The proposed restrictions on insurance subsidies are “not a fait accompli, not by a long shot,” said David Graves, manager for the American Association of Crop Insurers, a trade group in Washington that says the insurance subsidies are a better way to aid farmers than disaster assistance relied upon in the past. “Our journey has been to establish a public-private partnership for the good of the nation.”
Crop insurance, now the most expensive farm-aid program, has gained attention from budget watchdogs as its price tag has risen. President Obama sought this year to cut almost $12 billion from it over 10 years.
The crop insurance program, which subsidizes payouts at companies including Wells Fargo & Co., cost a record $14 billion last year covering crops ravaged by the worst drought in at least five decades. Taxpayers provide the majority of farmers’ premiums, cover much of an insurer’s administrative costs and guarantee that losses will be covered.