Senate votes to cut crop insurance aid for wealthy

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Associated Press

Posted on May 23, 2013 at 8:30 AM

Updated Friday, May 24 at 9:06 AM

WASHINGTON (AP) — The Senate on Thursday voted to limit the amount of government subsidies the wealthiest farmers receive when purchasing crop insurance.

The vote was one small victory this week for critics of a massive, five-year farm bill that would cost almost $100 billion a year and includes generous subsidies for the nation's biggest crops. Supporters have deflected other attempts on the Senate floor to reduce government help for agriculture, including proposals to trim sugar subsidies and crop insurance.

The amendment by Sens. Dick Durbin, D-Ill., and Tom Coburn, R-Okla., would reduce the government's share of crop insurance premiums for farmers with adjusted gross incomes of more than $750,000. It was approved 59-33.

Durbin said the amendment would affect about 20,000 farmers. Using a wealthy corn and soybean farmer in his state as an example, Durbin said the amendment would cut that farmer's premium subsidy from $740,000 to $639,000.

"At a time we're asking sacrifice from people in Head Start programs across America, can we be asking a little bit of sacrifice from 20,000 of the wealthiest farmers out of 2 million?" Durbin said.

Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., argued that the amendment would result in fewer people buying insurance and undercut a separate provision in the bill that would require farmers buying crop insurance to comply with certain environmental standards on their land.

Currently the government pays for an average 62 percent of crop insurance premiums and also subsidizes the crop insurance companies that sell the insurance. While cutting some other subsidies to divert money to deficit reduction, the bill maintains and even expands the crop insurance program favored by Midwestern corn and soybean farmers to bail them out when crops are destroyed by weather or if revenues dip.

The farm bill sets policy for farm subsidies, other rural programs, and domestic and international food aid. The bill would eliminate some subsidies paid to farmers whether they grow crops or not and make a small cut to food stamps — about $400 million a year out of the program's almost $80 billion annual cost.

Stabenow says the bill is the "most reform-minded farm bill in decades." But while the legislation would divert about $2.4 billion a year to deficit reduction, including across-the-board cuts that took effect earlier this year, it would still generously subsidize corn, soybeans, wheat, cotton, rice, sugar and other major crops grown by U.S. farmers.

Legislation approved by the House Agriculture Committee is similar in terms of farm policy, but would make about five times the cut in food stamp dollars. The full House is expected to consider the bill this summer.

Also Thursday, the Senate overwhelmingly rejected an amendment that would allow states to require labeling of genetically modified foods. Sen. Bernie Sanders, I-Vt., said his amendment was an attempt to clarify that states can require the labels, as several legislatures have moved toward putting such laws into place. Both the Vermont House and Connecticut Senate voted this month to make food companies declare genetically modified ingredients on their packages.

Senators from farm states that use a lot of genetically modified crops strongly opposed the amendment, saying the issue should be left up to the federal government and that labels could raise costs for consumers.

The Senate is expected to finish work on the bill at the beginning of June, after a weeklong recess for Memorial Day.

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Follow Mary Clare Jalonick on Twitter: http://twitter.com/mcjalonick

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