R Street Senior Fellow Andrew Moylan says the cost of federal crop-insurance subsidies have exploded in the past decade, going from $1.8 billion in 2001 to $7.5 billion last year.

He says the nonpartisan Congressional Budget Office estimates the change would save taxpayers $40.1 billion over the next decade, a period when crop-insurance subsidies currently are projected to cost roughly $9.1 billion a year. 

"What makes the crop-insurance program particularly troublesome is that, unlike other agricultural supports, the subsidies are neither means-tested nor subject to conservation-compliance requirements," Moylan said.

"The end result is that 26 large agricultural producers each banked more than $1 million in crop-insurance subsidies in 2011, while 10,000 received more than $100,000," he said. "Meanwhile, the program encourages farmers to convert to agricultural use that marginal land that is most subject to flood and erosion." 

Officials of the National Crop Insurance Service, based in Overland Park, Kans., which represents underwriters, declined comment.

The number of insurers in the market has shrunk as both the Obama and Bush administrations have moved to cut subsidies since 2008.

However, Starr Indemnity & Liability Company, a unit of Starr International, which is controlled by Maurice "Hank" Greenberg, recently became the 17^th insurer to enter the market. Another new entrant is is XL, based in Dublin. The largest are companies controlled by Wells Fargo and Ace Ltd.

An estimated 18,000 insurance agents sell this product, according to industry statistics. 

"The current U.S. fiscal crisis makes a strong argument for a commonsense rollback of crop-insurance subsidies," Flake said in announcing he had introduced the bill.

"I'm proud to have the support of Congressman Duncan in introducing this legislation, which offers an opportunity to have taxpayer-funded federal farm subsidies more realistically reflect our current fiscal situation."

 "The crop-insurance program has turned into a huge taxpayer-funded boon for some of the biggest, multi-national insurance companies and multi-millionaire farmers," Duncan says.