BIPARTISAN GROUP OF SENATORS CALL FOR TRANSPARENCY AND LIMITATIONS IN CROP INSURANCE SUBSIDIES
Propose Amendments to End Wasteful Subsidies, Require Disclosure of Premium Support Recipients
(WASHINGTON, D.C.) – Senator Jeanne Shaheen (D-NH) joined Senators Pat Toomey (R-PA), Jeff Flake (R-AZ), and Mark Begich (D-AK) this afternoon to call for billions in savings in the Farm Bill and highlight the need to bring greater transparency and common-sense limitations to crop insurance premiums. At a press conference in the US Capitol, the bipartisan coalition announced plans to introduce to amendments to the Farm Bill to implement much needed crop insurance reforms.
The first amendment introduced this afternoon, authored by Sens. Shaheen and Toomey, would cap crop insurance premium subsidies at $50,000, reducing the deficit by about $3.4 billion over 10 years, according to Congressional Budget Office estimates. The Government Accountability Office says fewer than 4 percent of producers would have been affected by a $50,000 premium support limit in 2011.
“Capping crop insurance subsidies will save taxpayers billions and help reduce our deficit. These subsidies represent some of the most egregious examples of excess government spending and if we implement these reforms, we can save $3.4 billion over ten years,” said Senator Shaheen (D-NH). “This is a matter of common-sense. I hope the senate will recognize that and join our efforts to amend the farm bill with this fix.”
“Crop insurance is billed as a safety net, but since there is no cap, this program irrationally pays out the most to those who need it the least,” said Senator Pat Toomey (R-PA). “The top 10 percent of policy holders get more than 50 percent of the subsidies. My amendment to the farm bill will save taxpayers billions without harming the vast majority of farmers by capping crop insurance premium subsidies at $50,000 per year per policy. This level is more than ten times what the average farmer in Pennsylvania receives.”
The second amendment, spearheaded by Sens. Begich and Flake, would bring transparency to the crop insurance premium program by permitting the U.S. Department of Agriculture (USDA) Risk Management Agency to disclose the names of policyholders, along with the amount of premium support they receive for crop insurance policies. The federal government currently spends almost $9 billion a year on crop insurance subsidies but there is no way to publicly track who receives the payouts because the USDA is not permitted to disclose their names, unlike other USDA programs.
“Taxpayers should have access to this information, which is why I’ve introduced this common-sense amendment to bring transparency to these payouts,” said Senator Mark Begich (D-AK). “We know some farmers need support with crop insurance payments. Greater transparency will help prevent waste, fraud and abuse – such as absent landowners, millionaires, or major corporations getting millions of dollars in subsidies - and help those who really need it.”
“I’m pleased to have worked with Senator Begich on our bipartisan amendment, which will provide transparency to the nation’s largest taxpayer-backed agricultural support program. It would allow public access to the specific distribution of billions in annual government payments to cover private industry administrative and operating expenses, and billions in premium subsidies to crop insurance policyholders. In a time of record debt and trillion dollar deficits, it is only right that the federal crop insurance program operate openly,” said Senator Jeff Flake (R-AZ).
In 2011, 26 policyholders received more than $1 million in premium support and more than 10,000 policyholders received $100,000 or more in premium support. Under current law, taxpayers provide on average 62 percent of crop insurance premiums and cover most of the indemnities when losses occur. During the next 10 years, CBO estimates the crop insurance program will cost taxpayers more than $90 billion.
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