Farm Groups Lose Big on Durbin Amendment to Reduce Crop Insurance Premium Subsidy for High Earner Farmers

May 23, 2013 10:35 AM

via a special arrangement with Informa Economics, Inc.

Crop insurance amendment wins in 59-33 vote, even after conservation compliance/crop insurance linkage

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

The Senate today cleared an amendment, 59-33, that reduces the federal crop insurance subsidy for top-earning farmers (with adjusted gross income over $750,000) from 62 percent, to 47 percent. The vote was a blow to farm groups, including the American Farm Bureau Federation which previously pushed an agreement with conservation groups against imposing additional restrictions on the crop insurance program, now that the bill includes a requirement that policyholders comply with rules on soil and wetlands protection.

It was the last vote on the farm bill (S 954) before the Senate breaks for its Memorial Day recess.


Stabenow challenged on topic in Senate floor debate. Senate Ag Chairwoman Debbie Stabenow (D-Mich.) warned several times that the amendment offered by Sen. Dick Durbin (D-ill.) could jeopardize the agreement reached to link conservation compliance relative to crop insurance, as the AGI test will prompt the affected farmers to not participate in crop insurance and raise the premium cost for those who still are in the program. That assessment was challenged by some senators who favored the Durbin amendment. Sen. Tom Coburn (R-Okla.), addressing the cautions raised by Sen. Stabenow, pledged that if the amendment is adopted and results in the scenario laid out by Stabenow, both he and Sen. Durbin would be happy to come to the Senate floor two years from now and offer their "mea culpas" on the matter.

Durbin said it was "not unreasonable" to ask more from farmers making more than $750,000 per year. Durbin's amendment would limit crop insurance premium subsidies for farmers making more than $750,000 annually, contingent on a USDA study of the impact on insurance rates. The amendment, cosponsored by Sen. Tom Coburn (R-Okla.), was adopted by the Senate last year when the chamber was considering its 2012 farm legislation. For farmers above the $750,000 threshold, their premium subsidies would be reduced by 15 percentage points. "They’ll still make a lot of money," Durbin said. The proposal would only impact about 1 percent of farmers or about 20,000 out of two million US farmers, Durbin said. "What we're suggesting is that instead of 62 percent of the premium being paid by taxpayers for the richest farmers in America, it be 47 percent of the premium. That is still pretty generous, is it not?" Durbin said while speaking on the floor.

But tobacco wins. Earlier today, the Senate defeated, 44-52, an amendment that would have ended insurance subsidies to tobacco producers.

Comments: This is one of several crop insurance-related amendments that have or will be debated. And, this is a clear signal that the crop insurance sector will be the area in the future where lawmakers look for additional cost savings. The hope by farm groups is that a similar provision will not be included in the coming House farm bill debate, and if not, then farm group lobbyists will seek to have the Senate bow to the House version on this topic. The Senate action also makes the linkage between conservation compliance and crop insurance an errant approach to thwart changes to the crop insurance sector -- at least on the Senate floor. The conservation compliance/crop insurance linkage deal was contingent on excluding any means testing or reduction in crop insurance premium subsidies. Conservation groups that were part of the agreement lobbied against the amendment, but that lobbying, along with farm group lobbying, proved to be deficient.


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.






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