Budget Proposal Includes Important Crop Insurance Reforms
Washington, D.C. - The 2015 federal budget released by the White House this morning includes important and very welcome initiatives to reform the bloated crop insurance program, Environmental Working Group's Craig Cox said in a statement.
The President’s common sense proposals include:
- Cutting the rate of return enjoyed by companies that sell crop insurance from 14 percent to 12 percent.
- Capping payments to crop insurance companies to administer the program at $0.9 billion a year.
- Reducing premium subsidies on the most heavily subsidized insurance policies by 3 percent, with an additional 4 percent cut on policies that dramatically overcompensated growers during the 2012 drought.
The President’s proposals would produce real savings of $14.2 billion over 10 years, unlike the mythical savings in farm subsidies included in the just passed farm bill. But they should be just the first steps toward more fundamental reform of the broken federal crop insurance program.
Crop insurance has strayed far from its original purpose – putting a floor under growers’ who suffer potentially crippling losses during a disaster. Overhauling the program would keep a fiscally and environmentally responsible safety net in place, while saving tens of billions of dollars that could be reinvested in programs to promote healthy diets and protect the environment.