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Republicans Propose Crop Insurance Subsidy Boost

Successful Farming’s Chuck Abbott reported Wednesday that “Republicans on the Senate Agriculture Committee proposed a $4 billion injection into the crop insurance program so that the government would pay a larger share of the premiums on policies offering the highest levels of coverage.”

The plan, known as the FARMER Act, “was estimated at $4.2 billion over 10 years, said (act sponsor Sen. John) Hoeven. The most recent Congressional Budget Office projections say crop insurance would cost $124.7 billion over the same period” according to Abbott.

Under the FARMER Act, “premium support for revenue and yield protection at the 80% coverage level would increase from 68% to 77%,” Farm Progress’ Joshua Baethge reported. “At the 85% coverage level, protections would increase from 53% to 68%. The proposed increases would only be provided to enterprises and whole farm units.”

“Premium support for the Supplemental Coverage Option would increase from 65% to 80%, while SCO coverage levels would increase from 86% to 90%,” Baethge wrote. “The FARMER Act also includes a provision directing USDA’s Risk Management Agency to conduct a survey on how to improve SCO effective in counties larger than 1,400 square miles.”

Plan Counters Democrat Proposal

The plan, known as the FARMER act, counters an earlier suggestion on crop insurance from Senate Ag Committee Chairwoman Debbie Stabenow, who said in January that “the way to provide higher levels of insurance coverage and streamline federal programs was to give farmers a choice: They could enroll in USDA crop subsidy programs or they could buy a highly subsidized revenue insurance policy,” Abbott reported.

“At present, upland cotton is the only commodity where that sort of policy, known as STAX, for Stacked Income Protection Plan, is offered and growers are barred from enrollment in crop subsidy programs,” Abbott reported. “The government pays 80 cents of every dollar in STAX premiums, while it pays 62 cents of each $1 in crop insurance premiums, on average. STAX provides coverage for up to 20 percent of expected crop revenue in a county or group of counties.

“Hoeven and his cosponsors proposed the opposite of Stabenow’s suggestion — farmers could purchase ‘enhanced crop insurance coverage’ if they wish, as well as signing up for the Price Loss Coverage or Agriculture Risk Coverage subsidies,” Abbott wrote.

Agri-Pulse’s Philip Brasher reported that Stabenow’s proposal was just “intended to ‘jump start’ negotiations on the farm safety net” and she said “in a statement that crop insurance was the ‘No. 1 tool in the farm safety net, and I’m glad that Senator Hoeven and others are exploring ways to improve it rather than just focusing on reference prices. I floated a proposal in January that would give farmers an additional choice of enhanced crop insurance to try to shake things loose on farm bill negotiations. I’m glad this worked.'”

Ag Groups Largely In Support

Baethge reported that “more than 20 ag groups have endorsed the bill, including the American Farm Bureau Federation, the American Soybean Association, the National Association of Wheat Growers, the National Cotton Council and the National Corn Growers Association.”

“’We appreciate Senator Hoeven’s leadership in expanding the affordability of crop insurance options for America’s farmers,’ AFBF President Zippy Duvall says,” according to Baethge’s reporting. “’The FARMER Act will make higher coverage more affordable and decrease the need for future ad hoc disaster assistance.’”

Other Groups Opposed

Some groups, however, including the Environmental Working Group and Taxpayers for Common Sense, expressed opposition, Agri-Pulse reported.

“Anne Schechinger, Midwest director for the Environmental Working Group, which has called for reducing premium subsidies, said in a statement to Agri-Pulse that the higher coverage levels were ‘already highly subsidized and are very expensive for taxpayers. Because they are the largest coverage levels available, the total dollar amounts of subsidy for these policies [are] already often very large.'”

“Joshua Sewell, director of research and policy for Taxpayers for Common Sense, said it would be irresponsible for Congress to increase premium subsidies ‘when we’re trying to enforce fiscal restraint in other parts of the farm bill.’ The cost of the increase should at least be offset by cuts to other farm programs, he said.”

Ryan Hanrahan is the Farm Policy News editor and social media director for the farmdoc project. He has previously worked in local news, primarily as an agriculture journalist in the American West. He is a graduate of the University of Missouri (B.S. Science & Agricultural Journalism). He can be reached at

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