U.S. Senators Jeanne Shaheen (D-NH) and Tom Coburn, M.D. (R-OK) this morning introduced legislation that would save taxpayers up to a billion dollars by capping federal crop insurance premiums for a select group of farm businesses. The bipartisan legislation would cap crop insurance premium subsidies at $70,000 per farm each year, resulting in savings that would reduce the deficit by approximately $1 billion over 10 years, according to agriculture policy analysts.
"Crop insurance subsidies are yet another example of egregious government spending that needs to be reeled in," Senator Shaheen said. "We need to protect taxpayers from footing the bill for a crop insurance program that benefits large companies that need it the least and at a level that is disproportionately more than what any New Hampshire farm receives. Capping crop insurance subsidies is a matter of common-sense that will save taxpayers a billion dollars, and we ought to act on this bipartisan proposal immediately."
"Crop insurance premium subsidies should go to those who need assistance rather than those who don't," Senator Coburn said. "The way to address trillion dollar deficits is one billion -- or million -- dollars at a time. This reform takes us $1 billion in right direction by ensuring that the wealthiest farm operations are not receiving unnecessarily large federal subsidies."
The bipartisan Agricultural Act of 2014, also known as the Farm Bill, included some key cost-saving measures but failed to implement any limitations on crop insurance subsidies. As a result, the flawed policy allows some crop insurance policy holders to continue receive more than $1 million each year in premium support.
Shaheen and Coburn's bipartisan proposal would cap crop insurance premium subsidies at $70,000, a limit that would impact less than 1.3 percent of producers, according to a 2011 Government Accountability Office report. The Congressional Budget Office estimates that if the crop insurance program continues at the current rate without reform, it will cost taxpayers more than $90 billion over the next 10 years.