Lyons, Nebraska – This week, the Center for Rural Affairs joined four other farm, rural and environmental organizations in signing and sending a letter to every U.S. Senator urging them to place limits on the federal crop insurance premium subsidies granted to individual farmers, establish income limits for subsidy recipients and require that recipients be actively engaged in farming.

“We are a diverse group of organizations united by the belief that responsible farm policy should direct subsidies for crop insurance premiums to farmers who need it,” said Chuck Hassebrook of the Center for Rural Affairs. “And Congress should cap those premium subsidies at levels that do not make it easier for the nation’s largest farms to drive out small, mid-sized and beginning farmers.”

To view or download a full copy of the letter go to: crop-insurance-letter.pdf

According to Hassebrook, federal farm spending is dramatically shifting from farm payments to subsidies for crop insurance, with the federal government now paying an average of 60% of premiums. Crop insurance expenditures are more than double traditional farm programs under the proposed new farm bill, with no subsidy limit and no eligibility requirements.

“The result will be an increase in the already excessive subsidies to the nation’s largest farms,” Hassebrook explained.

“In a time when federal dollars are scarce we are sending precious government resources to large and highly profitable agribusinesses while cutting food assistance to needy children and environmental protections for soil, water, and wildlife,” said Craig Cox, senior vice president of agriculture and natural resources at Environmental Working Group. “It is simply irresponsible to send unlimited subsidies to farm businesses that can easily afford to pay more of the cost for their crop insurance – 26 mega farms received over a million dollars apiece per year in crop insurance subsidies in 2011.”

The joint letter also explains that capping individual premium subsidies and setting income limits will not deny farmers access to needed risk protection.  And it is important to note that such a policy would not deny or cap insurance payments (indemnities) to farms facing losses.  Rather, it would limit subsidies on the front end for payment of premiums. These subsidies are highest in the best of times because it costs more to insure a crop at market value when its price is high.

“Federal crop insurance is a valuable tool for producers – one which we support.  Farmers need to be able to manage risks of failed crops and low prices to maintain their farms from year to year,” said Chuck Hassebrook of the Center for Rural Affairs. “But the emergence of crop insurance as the primary element of farm policy requires that it be subject to payment limitations and eligibility requirements, just like traditional farm programs.”

Press Release from Center for Rural Affairs
Established in 1973, the Center for Rural Affairs is a private, non-profit organization working to strengthen small businesses, family farms and ranches, and rural communities through action oriented programs addressing social, economic, and environmental issues.


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