Farm Bill amendments target crop insurance

The critics of federal crop insurance, expansion of which will be a key part of a new Farm Bill, may have found its soft underbelly: insurance for tobacco growers, the only remaining federal support for the controversial crop.

“Joe Camel’s nose has been under the tent all this time in the form of these hidden crop insurance subsidies,” said Republican Arizona Sen. John McCain, sponsor with Democratic Sen. Dianne Feinstein of California of a farm-bill amendment that would eliminate insurance for tobacco. She said, “It’s time for the American taxpayer to get out of the business of subsidizing tobacco — once and for all.”

McCain "estimated that eight tobacco insurance products offered by the Agriculture Department had cost taxpayers $34.7 million in 2012," David Rogers reports for Politico. "Much of the remaining tobacco grown in the U.S. is for export and enjoying such profits, McCain said, that 'it makes no sense' to continue the subsidies, worth an estimated $333 million" over the next 10 years.

Regardless of what happens to the tobacco amendment (No. 923), "Waiting in the wings are more broadly written Senate amendments, seeking to cut insurance subsidies for wealthier producers and even capping the total premium support allowed per farm," Rogers reports — noting that President Obama's proposed budget calls for a lower level of support for crop insurance than Congress envisions.

"While the government absorbs about 62 percent of the premium costs for crop insurance, the farmer never sees that subsidy. What he or she sees is the bill for the remaining 38 percent — not some cash handout like today," Rogers notes. "Nonetheless, Obama’s budget calls for trimming back on the premium subsidies between 3 to 5 percentage points depending on the nature of the policy for a net savings about $7 billion over 10 years. And there’s a growing consensus that some across-the-board reduction will have to come sooner or later." (Read more)

For a list of amendments, from DTN/The Progressive Farmer, click here.