By Chris Clayton
DTN Ag Policy Editor
OMAHA (DTN) -- Larger farmers would have to pay higher crop-insurance premiums under an amendment added to the Senate version of the farm bill on Thursday.
Repeating a provision they introduced last year, Sen. Dick Durbin, D-Ill., and Sen. Tom Coburn, R-Okla., got senators to back a plan that would lower the premium subsidy for farmers making more than $750,000 adjusted gross income. The vote was 59-33 despite opposition from leaders on the Senate Agriculture Committee.
Senators spent most of Thursday afternoon debating crop-insurance amendments before shutting down debate on the farm bill until they return from a break on June 3.
Under the Durbin-Coburn provision, those farmers making more than $750,000 would see their premium subsidy lowered from 62% to 47%.
Durbin and Coburn said their amendment would affect about 20,000 farmers and save $1 billion over 10 years. They also each noted that roughly 4% of farmers account for nearly 33% of all the premium support for the federal government. Those figures come from a Government Accounting Office report last year.
Durbin pointed to some large, diverse operations that have large amounts of premium subsidies now, including one farmer who received $1.8 million in premium subsidies last year. Another farmer's insurance premium was subsidized to the amount of $1.6 million. Durbin pointed out the administrative and operating costs paid on that one multi-state policy was $433,000.
"If we can't say to the 1% of farmers, the wealthiest of the country, that you are going to take a slightly diminished federal subsidy for your crop insurance, then we are not very good budget cutters," Durbin said on the floor Wednesday.
Coburn noted everyone receiving federal assistance is going to face tighter requirements and means testing over time and users of crop insurance are no different.
"On every other program, we are going to ask those who have more to participate more," Cochran said.
Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., had largely been able to stave off changes to the farm bill this week on the floor. That wasn't the case with the Durbin-Coburn amendment despite her arguments that it would put at risk an agreement struck between farm and conservation groups.
Stabenow also noted higher premium costs could prompt large farmers to stop buying crop insurance altogether. "Crop insurance is insurance. The farmer gets a bill, not a check," Stabenow said.
Coburn countered that large farmers would still make an economic decision to buy crop insurance. "They won't go out because it's still too much of a sweetheart deal."
Durbin also said he supports tying conservation compliance to crop insurance premium subsidies anyway. "I don't think it's too much to ask for farmers participating in the crop insurance program also participate in conservation practices to protect farmland across this country," Durbin said.
The House Agriculture Committee version of the farm bill does not include any means testing for crop insurance, nor does the House bill tie conservation compliance to eligibility for the crop-insurance premium subsidy.
The Sustainable Agriculture Coalition issued a statement praising senators for backing the Durbin-Coburn amendment. "We are delighted the Senate held firm for common sense reforms that strengthen the farm safety net. 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."
In another vote related to crop insurance, senators also voted 94-0 to expand efforts to root out fraud in the program through better data mining efforts. Sen. Kay Hagan, R-N.C., offered the amendment, citing a major federal crop-insurance fraud case in her state. Hagan said the amendment's cost was minimal, but would generate substantial savings by reducing crop-insurance fraud.
Another amendment that would have eliminated all crop-insurance premium subsidies for tobacco farmers was defeated in a 44-52 vote.
Chris Clayton can be reached at email@example.com
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