House and Senate leaders added a provision to a compromise transportation bill that would eliminate a $3 billion cut in crop insurance spending, making good on a promise to farm-state lawmakers. The cut was approved as part of two-year budget agreement at the end of October with assurance it would not take effect. Farm groups and their allies in Congress said it was unfair to target crop insurance because it was essential to protecting farmers from losses. “My goal was to nip crop insurance cuts in the bud before cuts took effect to harm farmers, and I’m proud to say we’re one big step closer,” said Senate Agriculture chairman Pat Roberts of Kansas after the new version of the transportation bill was unveiled.
The $3 billion cut would reduce the return on investment to insurers to 8.9 percent. Three trade groups for the insurance industry said federal spending on crop insurance has been cut by $12 billion since 2008. Agri-Pulse said the $3 billion in savings would come instead from a Federal Reserve dividend cut for big banks, according to a House staff worker.
“Rhetorically, this is a Congress that applauds federal belt tightening, but in practice hands out billions in taxpayer-funded giveaways to the crop insurance industry,” said the Environmental Working Group, which has called for cuts to “Cadillac” coverage for farmers.