Rep. Earl Blumenauer (D-Ore.) introduced a crop insurance reform bill aimed at reducing costs and better targeting support toward small and mid-sized farmers. The proposed reforms include limiting farmers to a maximum of $125,000 in premium subsidies annually and denying subsidized coverage to farmers with over $250,000 in adjusted gross income. The bill also eliminates premium subsidies for policies with the harvest price option and reduces guaranteed returns to insurance companies and USDA payments to insurers for administrative and operating costs. If implemented, these reforms could save an estimated $2.7 billion annually, significantly reducing the cost of the crop insurance program.
Outlook: The proposal is given very low odds of being part of the coming farm bill debate and/or separate legislation or an amendment to another bill. Says one farm policy analyst: “It didn’t seem possible, but the Blumenauer proposal makes the EWG proposal even worse. The ‘reform’ is a Trojan Horse because it would wipe out all of the pillars that made crop insurance what it is today. Crop insurance would be back in the 1970s barely limping along and ad hoc disaster would once again be the norm.”
