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Provision Could Raise Crop Premiums, Cap Subsidies

Under the Senates proposed amendment, premiums would rise 15 percent for farmers with incomes of more than $750,000.

By Melissa Hillebrand | Updated on August 23, 2012

Farmers could see another round of cuts to crop subsidies under recent proposed changes to the Federal Crop Insurance Program (FCIP). Estimated cuts over the past 10 years total $12 billion. Senate legislation includes a provision for establishing a means test for crop insurance payments, but the provision was not included in a recent report by the House Agricultural Committee. Under the Senate’s proposed amendment, premiums would rise 15 percent for farmers with incomes of more than $750,000.

The FCIP is a primary risk management tool for farmers. Eighteen thousand agents serviced 1.15 million crop insurance policies in 2011. IIABA warns that limiting crop participation will have negative effects such as reducing producer financing, forcing farmers to look for disaster assistance elsewhere. IIABA wants to ensure that crop insurance agents can continue to advise farmers about coverage choices within the program.

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