U.S. Senate votes to cut insurance subsidies to rich farmers

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The wealthiest 20,000 U.S. farmers should pay more for taxpayer subsidized crop insurance, the Senate voted May 23, adopting a measure that blended deficit reduction, populism and farm program reform.

Senators approved the amendment by a lopsided 59-33 vote, in defiance of Agriculture Committee leaders. The move would save $1.3 billion over a decade by reducing the premium subsidy for growers with more than $750,000 of adjusted gross income.

Crop insurance, which pays out if farmers’ crops are damaged, is the costliest part of the farm safety net, costing $9 billion a year. It would expand by five per cent in the Senate bill even as other farm, conservation and nutrition programs are cut by $24 billion over 10 years.

Agriculture chairwoman Debbie Stabenow of Michigan said she expected more attempts to rein in crop insurance spending before the Senate votes on the full five-year, $500-billion bill in early June. One pending amendment would limit farmers to $50,000 a year in insurance subsidies.

The government currently picks up 62 cents of each $1 in crop insurance premiums. The subsidy would drop to 47 per cent for the top one per cent of growers under the latest amendment.

Stabenow said some farmers would find the reduction too onerous, coming on top of a requirement to practise soil conservation in order to qualify for subsidized insurance, and would drop out of the program.

Tom Coburn, the Oklahoma Republican who co-sponsored the amendment, said farmers would still be getting “too much of a sweetheart deal” to drop out of the program.

The Democratic-controlled Senate earlier defeated Republican proposals to cut food stamps by $31 billion over a decade and to convert food stamps into a block grant.

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