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Crop insurance showdown looms

Senator Tom Coburn, an Oklahoma doctor who is leading a crusade against the rising federal deficit, is planning to introduce an amendment to the Senate Agriculture Committee’s farm bill that would cap crop insurance premium subsidies.

Coburn’s spokeswoman, Becky Bernhardt, when asked by if the Republican senator plans to introduce an amendment with a $40,000 cap or some other level, replied in an email message, “The short answer is yes,” Bernhardt said. “It is Senator Coburn’s hope that the ultimate result will be for the Senate to engage in debate and vote on amendments to the farm bill that would include GAO’s recommendations and save taxpayers $1 billion.”

That would be the annual savings from a $40,000 cap according to the Government Accountability Office, which responded to Coburn’s request to look for ways to save money on crop insurance programs. It was just one example cited by the investigative arm of Congress. GAO also said USDA’s data mining program could be improved with better coordination between Farm Service Agency and the Risk Management Agency and insurance companies. It also said money could be saved by lowering the premium subsidy for all farmers.

Earlier this week, Coburn and Senator Dick Durbin, a Democrat, who is assistant majority leader in the Senate, sent a letter to the leaders of the Senate Agriculture Committee saying “we support further reforms to the federal crop insurance program that would be consistent with the findings and recommendations of the recent…(GAO) report.”

“Based on GAO’s findings, we believe further investigation into the efficacy of reducing premium subsidies is warranted,” said the letter, which was sent to the committee’s chairwoman, Senator Debbie Stabenow (D-MI) and the ranking Republican, Senator Pat Roberts of Kansas.  “Large farms are better positioned than smaller farms to pay a higher share of premiums, according to GAO.”

Coburn and Durbin responded, too, to members of Congress who say crop insurance programs have already been cut enough.

“Let us be clear: further reductions to crop insurance are not a reflection of opposition to the program. In fact, we would argue the opposite – it is critical to make good programs better to ensure they are performing as intended and are fiscally sound taxpayer investments,” the senators said.

David Graves, manager and secretary of the American Association of Crop Insurers in Washington, DC, told that his group has been preparing for floor amendments that might affect crop insurance when the farm bill comes up for a vote in the full Senate.

“We know these kinds of questions are out there but over the 30 years I’ve been hearing them, there are always these kinds of questions,” Graves said.

Over that time, Congress has expanded the role of federal crop insurance, and the Senate Agriculture Committee’s bill for 2012 includes new programs, he said.

“We don’t believe Congress should or will be unduly swayed by these arguments because they miss the point,” he said—and the point is that all farmers are subject to forces they can’t control.

“It’s important that all of the production acres and all of the farmers have an opportunity to participate in a program that helps them with risk factors beyond their control,” Graves said.

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