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Crop Insurance Reform Would Save Lots of Taxpayer Money
Posted By Daren Bakst On May 23, 2013 @ 5:10 pm In Ongoing Priorities | Comments Disabled
Crop insurance is probably not the first thing you want to talk about at a cocktail party. It isn’t sexy. However, it starts looking a lot prettier when common-sense reforms to crop insurance could save taxpayers billions of dollars.
The Senate is currently debating its bloated farm bill. The Congressional Budget Office (CBO) projects  that it would cost $955 billion over the next 10 years. This will inevitably be a conservative estimate. When trillion-dollar bills are being discussed in Congress, we all need to pay attention.
The direct payments program gets all the negative publicity—and rightfully so. After all, taxpayers are paying farmers to grow nothing. Yet, the costliest farm program is crop insurance.
Basics of Crop Insurance Costs
From 2000 to 2006, the average annual cost of the crop insurance program was $3.1 billion per year. For 2013–2022, that number is expected to grow  to $8.9 billion. That’s almost triple the cost.
In 2000, taxpayers paid 37 percent of the premium subsidies for farmers. In 2011, that number  was 62 percent. This doesn’t even include the administrative fees that taxpayers pay to insurance companies that participate in the crop insurance program.
Does the Senate Farm Bill Rein in Costs?
Not even close. In fact, the CBO projects that the Senate bill would increase crop insurance costs by about $5 billion  from 2014 to 2023.
What Can Be Done?
Here are two simple, common-sense reforms that would save taxpayers a lot of money:
Taxpayers Need to Be Considered
When it comes to the farm bill, taxpayers are often ignored. Crop insurance reform would keep taxpayers in mind: Even President Obama is pushing  for a reduction in the percentage of the subsidy that taxpayers have to pay. The Senate should take major steps to reform the farm bill. At the very least, it should take these common-sense steps that would save billions of dollars.
Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org
URL to article: http://blog.heritage.org/2013/05/23/crop-insurance-reform-would-save-lots-of-taxpayer-money/
URLs in this post:
 Image: http://blog.heritage.org/wp-content/uploads/Crops130523.jpg
 projects: http://www.cbo.gov/sites/default/files/cbofiles/attachments/s954_StabenowLtr.pdf
 grow: http://www.gao.gov/assets/590/589305.pdf
 $5 billion: http://www.cbo.gov/publication/44248
 pushing: http://www.reuters.com/article/2013/05/20/usa-agriculture-idUSL2N0E120520130520
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