Attention for farm bill has become an important target for lawmakers.
Now that the election is behind us, crop insurance federal subsidies will return to the spotlight as a major target for lawmakers who are seeking to slash the budget deficit in Congress’s first week of the lame duck session.
Experts in agricultural policy feel that this is a typical week following a general election.
Many doubt, however, that lawmakers will be able to make their way through the deadlock they have been facing regarding the enacting of a $500 billion, five year farm bill. It is designed to address a swath of agricultural policy that covers everything from crop insurance to food stamps, and growers subsidies to soil conservation.
The crop insurance this year nearly doubled previous costs due to the massive Midwest droughts.
It is believed that the drought, which doesn’t seem to want to go away, may already be threatening the crop insurance costs for next year, as well. Another issue that policy watchers will be eyeing regarding the farm bill will have to do with whether Tom Vilsack will be serving a second term as Agricultural Secretary following Barack Obama’s re-election as President.
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At the moment, many believe that it looks quite unlikely that a five year farm bill will result from the lame duck session, unless it can be incorporated into a budget agreement. However, many also believe that the odds of a budget deal are quite slim.
Among the most important elements of the safety net for growers and livestock farmers is crop insurance. At the moment, this costs an average of $7 billion per year to the federal government. This year, it is expected that those costs will have more than doubled to $15 billion, as the government will be responsible for the burden of the majority of the underwriting losses for the 16 insurers within that sector.
The complete cost of the drought’s losses will be identified during the post election congressional session. It is believed that this session will focus quite squarely on crop insurance. Though farmers have already collected indemnities worth $3.6 billion this year, it is believed that the figure will skyrocket to as much as $25 billion.