A dozen conservative groups and the Environmental Working Group are backing proposals in Congress to eliminate premium subsidies for the Harvest Price Option in crop insurance. The idea is sponsored by Sens. Jeff Flake and Jeanne Shaheen and Rep. John Duncan. It goes farther than a White House proposal for farmers to pay a larger share of the premium on the HPO, which bases revenue insurance coverage on a crop’s price at harvest time. If commodity prices rise, farmers who choose HPO can actually collect more revenue than they were guaranteed at planting time, says Flake.
In a letter to lawmakers, supporters say the HPO boosted the cost of crop insurance by $6 billion during the widespread 2012 drought. “This common-sense legislation would protect taxpayers from being asked to subsidize the most costly and extravagant federal crop insurance product,” the letter says. Signers included Club for Growth, Heritage Action, National Taxpayers Union, Taxpayers for Common Sense and the R Street Institute.