ALLENTOWN — Last week, U.S. Sens. Pat Toomey, R-Pa., and Jeanne Shaheen, D-N.H., introduced the Assisting Family Farmers through Insurance Reform Measures (AFFIRM) Act, legislation that would reform the federal government’s crop insurance program to better protect taxpayers.
The federal crop insurance program is operated through the U.S. Department of Agriculture and aims to protect American farmers from losses due to lower-than expected crop prices or low crop yields. However, the cost of the federal crop insurance program has dramatically increased in recent years, and the program currently contains practically no limitations on its federal subsidies. According to the Congressional Budget Office (CBO), the AFFIRM Act would save $34.7 billion over ten years by enacting reforms that will cut waste and reduce taxpayer subsidization of profits for insurance companies and large agri-businesses.
“There is no good reason for taxpayers to subsidize crop insurance premiums for massive agriculture operations,” said Toomey. “This is nothing more than corporate welfare. Enacting these bipartisan reforms would save billions in taxpayer dollars and put our country on a more sustainable fiscal path.”
For her part, Shaheen said, “We can protect farmers without putting taxpayers on the hook for excessive subsidies to insurance companies and large agri-businesses that don’t need the help. By enacting much-needed and common-sense reforms, the AFFIRM Act will save taxpayers billions. I urge Congress to act on this bipartisan proposal.”
The AFFIRM Act would limit federal crop insurance subsidies to $40,000 per farmer, per year. While other major federal farm subsidies have basic payment limits preventing individuals from getting huge payouts, crop insurance premium subsidies have no individual limits at all. As a result, while many farmers receive $10,000 or less per year to help them pay for their crop insurance, a small group of large agribusinesses receive as much as $1 million per year in a direct federal subsidy.
It would eliminate crop insurance premium subsidies for individuals with an adjusted gross income of more than $250,000. Crop insurance subsidies are the only major agriculture subsidy not subject to income limits. Premium subsidies should be going to smaller farms that need the support and not to large companies that can afford to manage their own risk.
