Farm bill that US Senate considering this week would cut some farm subsidies, expand government-subsidized crop insurance

Nevin Barich

Nevin Barich

WASHINGTON , May 21, 2013 () – SENATE DEBATING GOVERNMENT-SUBSIDIZED CROP INSURANCE IN FARM BILL

The farm bill the Senate is considering this week would cut some farm subsidies but also expand government-subsidized crop insurance, a safety net used by many farmers in case of bad weather or lost revenue.

The program has risen in popularity in recent years, especially in the Midwest, and helped many farmers recover financially after last year's blistering drought. Farm-state lawmakers 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.

"It's a public private-insurance system that is frankly working very well," Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., said on the Senate floor Monday.

Not everyone in Congress wants to see the program expanded. Several senators are planning to offer amendments to limit the program, saying federal contributions to crop insurance are too generous and subsidize big agricultural businesses.

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 percent 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.

Sen. John McCain, R-Ariz., offered the first crop insurance amendment Monday, proposing an end to $33 million a year in insurance policies for tobacco farmers. A buyout for tobacco farmers enacted nine years ago is phasing out government payments to tobacco farmers, but many of them still receive crop insurance.

"It turns out Joe Camel's nose has been under the tent this whole time in terms of crop insurance subsidies," McCain said, referring to a character that used to appear on packs of Camel cigarettes.

The Obama administration also said it wants to see more cuts to crop insurance 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 White House did not specify how large a cut it was seeking.

The Senate bill would expand crop insurance by creating a new "shallow loss" program to aid farmers before their paid crop insurance policy kicks in. It would also expand other parts of the current program.

The overall bill would cut about $2.4 billion annually from overall farm spending, while expanding the crop insurance and also raising some subsidies for rice and peanut farmers. The Senate began debating the legislation Monday and is expected to consider the bill for several days.

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, the federal help for crop insurance and programs to protect environmentally-sensitive land.

While calling for deeper cuts to subsidies, the White House also called for Congress to maintain the strong safety net farmers have now. Current farm programs expire Sept. 30.

"It is critical that the Congress pass legislation that provides certainty for rural America and includes needed reforms and savings," the White House said.

The Senate passed a similar bill last year, but the House did not consider it. The House Agriculture Committee approved its version of the farm bill last week with a similar expansion of crop insurance. The full House is expected to vote on the bill this summer.

___

Find Mary Clare Jalonick on Twitter at http://twitter.com/mcjalonick

Copyright (2013) Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Associated Press text, photo, graphic, audio and/or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. Neither these AP materials nor any portion thereof may be stored in a computer except for personal and non-commercial use. Users may not download or reproduce a substantial portion of the AP material found on this web site. AP will not be held liable for any delays, inaccuracies, errors or omissions therefrom or in the transmission or delivery of all or any part thereof or for any damages arising from any of the foregoing.

AS-image © 2024 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Share:

About Us

We deliver market news & information relevant to your business.

We monitor all your market drivers.

We aggregate, curate, filter and map your specific needs.

We deliver the right information to the right person at the right time.

Our Contacts

1990 S Bundy Dr. Suite #380,
Los Angeles, CA 90025

+1 (310) 553 0008

About Cookies On This Site

We collect data, including through use of cookies and similar technology ("cookies") that enchance the online experience. By clicking "I agree", you agree to our cookies, agree to bound by our Terms of Use, and acknowledge our Privacy Policy. For more information on our data practices and how to exercise your privacy rights, please see our Privacy Policy.