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Senate trims insurance subsidies for some

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.

Reaction in the farm community was muted to the Senate vote. Some conservation groups welcomed it.

"We are delighted the Senate held firm for common sense reforms that strengthen the farm safety net," said Ferd Hoefner of the National Sustainable Agriculture Coalition. "By once again passing the Durbin-Coburn amendment, the Senate is on record in support of reform that aids family farmers, reduces incentives to environmentally harmful overproduction, and saves the taxpayer money." The amendment is projected to save about $1 billion over 10 years.

NSAC didn't support the compromise that swapped the income test for conservation compliance. One group that did, American Farmland Trust, was worried that conservation compliance is threatened. On Thursday it told supporters: "We are proud of this achievement, but we need your help! The Farm Bill is being considered on the Senate floor as you read this and amendments are lining up to strip out this important agreement. We cannot let that happen!  Please contact your senators today."

The Senate also voted Thursday to give USDA's Risk Management Agency more funds for data mining and efforts to prevent fraud in crop insurance.

"For federal assistance to continue, the integrity of these programs must be rock solid," said the amendment's sponsor, Senator Kay Hagan (D-NC). In March of this year the Department of Justice announce a $100 million fraud case in her state that involved growers of wheat, soybeans, tobacco and corn.

No one wanted to be soft on fraud. Hagan's amendment passed 94-0.

Later, Hagan said in a statement, ""After the largest-ever crop insurance fraud ring was uncovered this year in North Carolina, many North Carolina farmers approached me with concerns that these bad actors, combined with federal budget woes, could mean the end of federal crop insurance, and I introduced this amendment to support fraud prevention to make sure these honest farmers don't pay the price for the actions of just a few," said Hagan. "By equipping the Risk Management Agency with the funds they need, we can more effectively combat fraud and abuse that wastes taxpayer dollars and jeopardizes critical support for North Carolina farmers. I am pleased my bipartisan amendment passed the Senate in what is a true victory for North Carolina's hardworking farmers."

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