Rep. Earl Blumenauer (D-Ore.) has introduced a crop insurance reform bill aimed at reducing costs and better targeting support to small and mid-sized farmers. The proposed reforms include limiting farmers to a maximum of $125,000 per year in premium subsidies and denying subsidised coverage to farmers with adjusted gross incomes over $250,000. The bill also eliminates premium subsidies for crop-price option policies 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 has a very low chance of being part of the upcoming 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 the pillars that have made crop insurance what it is today. Crop insurance would barely limp back to the 1970s and ad hoc catastrophes would once again be the norm”.
