This week Senators Tom Coburn (R-OK) and Dick Durbin (D-IL) took an important step highlighting the need to rein in the largest taxpayer subsidy to agricultural businesses. On Tuesday they sent a letter to the leadership of the Senate Agriculture Committee indicating “it is our belief that the crop insurance program can benefit from commonsense structural changes and save significant taxpayer dollars while maintaining the necessary safety net.” The letter also points to the conclusions of a recent GAO report that determined taxpayers could save $1 billion simply by capping premium subsidies at $40,000.
The letter from Coburn and Durbin shows not everyone in the Senate will stand by as Ag interests try to plow taxpayers under. The Senate Agriculture Committee recently adopted a Farm Bill that did not take a single step toward improving this program that cost taxpayers $11 billion in 2011 and is projected by CBO to cost more than $90 billion over the next decade. In fact their bill greatly increases the likelihood taxpayers will be on the hook for guaranteeing even more farm business revenue by creating two new “shallow loss” programs that pay agricultural businesses when they “suffer” as little as a 10% loss in their expected revenue.
Increasing already massive taxpayer subsidies for crop insurance is indefensible. The Farm Bill that passed out of committee needs a drastic overhaul to make it taxpayer-friendly. Reforming crop insurance is a must.