The government would save money and better target the crop insurance system toward small and mid-sized farmers by denying subsidized policies to the wealthiest growers and by limiting the value of premium subsidies to eligible farmers, said Rep. Earl Blumenauer on Tuesday. The restrictions would reduce the cost of crop insurance by an estimated $2.7 billion a year, a quarter of its projected cost over the next 10 years.
An Oregon Democrat, Blumenauer introduced a crop insurance reform bill that would limit farmers to an annual maximum of $125,000 in premium subsidies and deny subsidized coverage to farmers with more than $250,000 a year in adjusted gross income. The bill would also eliminate premium subsidies for policies with the harvest price option, a popular format, and reduce the guaranteed return to insurance companies and USDA payments to insurers for administrative and operating costs.
“By establishing modest payment limits and means tests, we can save money while helping small farmers and ranchers who are short-changed or left out altogether,” said Blumenauer. Crop insurance “provides virtually no support for Oregon and our diversified agricultural base,” he added.
The bill was backed by eight environmental, small-farm, and budget hawk groups that have criticized the federally subsidized crop insurance program repeatedly this year. The government pays 62 cents of every $1 in premium.