Growers may see reduced coverage levels in order to save taxpayers $24.4 billion over a decade.
Two state representatives in Wisconsin have now introduced a bill called the Assisting Family Farmers through Insurance Reform Measures (AFFIRM) Act, which will slash crop insurance with the intention of providing taxpayers with savings over the next ten years.
In the span of a decade, the insurance coverage cuts will mean $24.4 billion in expenses will be saved.
According to farm subsidy program critic, Congressman Ron Kind (D), the crop insurance bill will still provider family farmers with the type of solid safety net that they require in order to protect themselves against the unexpected. The congressman explained that the current insurance system for growers has a very wasteful design and it is “in need of major reform.”
That said, the bill to reduce crop insurance for growers currently has bipartisan support in Wisconsin.
In agreement with Kind is Congressman Jim Sensenbrenner (R). He said that the farm insurance bill will provide a couple dozen billion in savings over a decade and added that the areas in which the cuts were actually made were designed “to reduce unnecessary subsidies directed towards our country’s largest and most profitable farms and agribusinesses.”
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This new legislation has arrived only about a week after a budget agreement was passed by Congress that would reduce the profit margins that are being permitted to insurance companies selling crop coverage. The reduction will be from the previous 14 percent to a notably lower 8.9 percent. That, alone, is expected to provide a savings of about $3 billion.
Crop insurance is traditionally a topic in which there is a considerable amount of controversy as many feel that it is a requirement in order to keep the country’s vital agricultural industry alive and well. However, at the same time, it does come with a considerable expense, so the design that is used in order to provide that type of coverage is continually under scrutiny. The goal is to ensure that farmers receive the protection they need against the unexpected, without simply pouring money down the drain.