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Senate trims insurance subsidies for some

DANIEL LOOKER Updated: 05/24/2013 @ 9:50am Business Editor

Senator Tom Coburn (R-OK) doesn't think the federal government should saddle our children with debt to pay 62% of high-income farmers' crop insurance premiums. And Senator Dick Durbin (D-IL) doesn't think such high subsidies are fair when low-income Americans are being cut from federal programs.

Thursday the Oklahoma fiscal conservative and the Illinois Democrat who ranks second in Senate leadership convinced a majority for the second year in a row to trim crop insurance subsidies for farmers with adjusted gross income above $750,000. Their amendment passed by a vote of 59-33, only slightly smaller than a similar change to the 2012 Senate Farm Bill that drew two-thirds support.

Most Senate Agriculture Committee members voted against it, including its chairwoman, Debbie Stabenow (D-MI) who argued that a compromise between farm groups and conservationists "is undermined with the passage of this amendment."

Major farm groups have opposed cuts to crop insurance subsidies, as well as any linkage to conservation rules on erodible land and wetlands being tied to crop insurance. But early this month they agreed to having premium subsidies tied to conservation rules if conservation groups wouldn't push for the Coburn-Durbin income limit on subsidies.

The amendment trims the average premium subsidy for high-income farmers from 62% to about 47%, a 15-point decrease.

Durbin said it would affect 20,000 farmers.

"For that tiny 1% of farmers across America making over $750,000 a year, their subsidy will be cut from 62% to 47%," he said.

The largest farm getting crop insurance, Coburn said, "gets $1.9 million in subsidies a year. All we're going to do is cut it to $1.6 million."

Stabenow said it shouldn't be surprising that large farms get the most insurance support, "because they have the most land to insure."

Conservation groups and the ag committee want those large tracts of land subject o conservation rules. If they don't carry insurance, that may be less likely. It would also threaten to raise premiums for farmers who remain in the crop insurance program, she said.

Coburn argued that large farms want to protect their land. And, ""They won't go out. It's too much of a sweetheart deal. We're still going to pay almost half" of premiums, he said.

At the end of Thursday, the compromise agreement Stabenow described as "delicately put together," had changed to a similar version found in last year's farm bill, with all farmers required to meet conservation rules for crop insurance and high income growers paying more.

The Senate bill is a way from becoming law. Stabenow said late Thursday that debate on the bill resumes on Monday, June 3. The House still has to take up its own version, likely in June. Its ag committee bill doesn't have the Senate's conservation rules or limits on premiums.

However, Representatives Mike Thompson (D-CA) and Jeff Fortenberry (R-NE) are sponsoring a conservation compliance amendment. And several members of the House are considering amendments similar to the one promoted Thursday by Coburn and Durbin.

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