Crop insurance and farm bill update
Apr 12, 2013
Pro Farmer Extra
- From the Editors of Pro Farmer newsletter -
April 12, 2013
Pro Farmer Associate Editor Meghan Pedersen and Washington consultant Jim Wiesemeyer offer this latest update on a couple of key ag issues inside the Beltway:
Several proposals in the budget deal with this program, including two provisions for crop insurance companies: trim the rate of return to 12% (currently estimated at around 14%) and to base the reimbursement for administrative and operating expenses on 2006 premiums not the current 2010 premiums that were some of the highest in history for the program.
But producers would also see cuts — a three-percentage-point reduction in the premium subsidy on policies subsidized more than 50%, and a cut of two percentage points on the premium subsidy where producers elect to have policies that provide protection against price increases. Many in Congress will fight this effort, but reducing the premium subsidy is likely to become reality at some point.
New farm bill
The Senate Ag Committee will mark up its bill this month or early May. The House Ag Panel will follow. An important factor is getting one unified savings number; that may not happen until debt limit hike talks end in late July/early August.
Key farm bill issues ahead: One is the amount of food stamp savings. This figure will most likely be determined via an agreement between congressional leaders and the White House. As for the likely farmer safety net in the final bill, it will consist of crop insurance (including the Supplemental Coverage Option) and an optional target (reference) price option. There won’t be a shallow loss/Ag Risk Coverage program due to cost factors.
Follow Pro Farmer Editor Chip Flory on Twitter: @ChipFlory
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