In a decade, government outlays to subsidize crop insurance increased 60 percent, expanding in step with the rapid growth in acreage covered by the policies, according to Risk Management Agency data released Sunday. Some $11.6 billion in premium subsidies has been paid for the 2022 crop year, the highest amount ever.
Premium subsidies cost almost $7 billion in crop year 2012, when 282.9 million acres were insured. In 2022, 493.3 million acres were insured. To encourage enrollment, the government pays 60 cents of each $1 of premium. Premiums totaled $18.4 billion on 2022 crops, with $15.9 billion paid in indemnities.
Crop insurance “is the most expensive program authorized in the farm program, excluding nutrition spending,” said the National Sustainable Agriculture Coalition. Despite the rising cost of crop insurance, the government has spent $60 billion since 2017 in various aid packages, including trade war, pandemic relief and disaster assistance programs, it said. “To curb wasteful spending and to promote resilience in the food system, Congress must introduce reasonable caps on crop insurance subsidies in the 2023 farm bill.” NSAC suggested reforms such as reducing the subsidy rate on policies sold to farms with more than $750,000 annual adjusted gross income.