Budget Proposal Would Reform Broken Crop Insurance Program
Washington, DC – The Obama administration’s fiscal year 2016 budget proposal contains two common-sense reforms to the broken federal crop insurance program that would save taxpayers billions of dollars and protect our land and water, EWG said in a statement.
The proposed budget would:
- Cut overly generous premium subsidies by 10 percentage points for so-called Revenue Protection policies, which greatly overcompensate growers when crop prices rise during a drought. During the 2012 drought, many farmers covered by these policies actually made more money than they would have in a non-drought year.
- Make three important changes to the so-called prevented planting insurance coverage that would lower the large payouts that encourage farmers to plow up wetlands or plant their crops on other risky and environmentally sensitive land.
Combined, these two reforms would save taxpayers an estimated $16 billion over 10 years.
“The administration’s proposed reforms to these two subsidy programs are much needed fixes that will save taxpayers billions of dollars and shield land and water from further abuse,” said Craig Cox, EWG’s senior vice president for agriculture and natural resources. “Reducing premium subsidies for revenue protection policies and adjusting payment rates for prevented planting are common-sense ideas that should garner bipartisan support in Congress.”
“If Congress is serious about reducing the deficit, it needs look no further than the farm subsidy reforms proposed by in the administration’s FY2016 budget,” said Scott Faber, EWG senior vice president for government affairs.