A recent report by congressional auditors suggests that limiting farm subsidies available to large-scale farmers could save taxpayers billions of dollars.
With the federal budget deficit continuing to rise and with politicians on both sides of the aisle clamoring for austerity cuts, taxpayer and representatives have targeted farm subsidies, looking for ways to reduce farm spending without undermining agricultural production. Farmers and politicians have already agreed to eliminate direct payment subsidies, a decades-long farm support staple, in exchange for increase crop insurance funding.
The latest congressional report could limit access to crop insurance support, however. By reducing the amount of money paid to farmers to offset the cost of crop insurance premiums, the government could save up to $1 billion a year. Under the current system, farmers buy private insurance, but the federal government covers up to 62 percent of the premiums.
Some politicians and political activists have already suggested capping crop insurance support at $40,000 in an attempt to limit wealthy, large-scale farmers’ ability to receive unlimited government support.
While few expect politicians to limit access to crop insurance in the current election year, the program’s increasing costs are sure to place it at the center of the political stage in the next few years. Already, crop insurance costs have exploded from $1.2 billion in 2000 to $7.3 billion in 2011. Expected costs over the next four years could reach $40 billion.
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Written by: Justin Ellison / Farm Plus Staff Writer