U.S. Senator Russ Feingold says his efforts to reform crop insurance subsidies will save billions in taxpayer dollars, and is reflected in a draft of a new crop insurance plan recently released by the U.S.
Department of Agriculture. The Middleton Democrat included a provision to reform crop insurance subsidies in his Control Spending Now Act, which is made up of more than 40 specific proposals to cut
roughly one half trillion dollars in government spending.
Feingold's bill would reduce federal subsidies for crop insurance companies' administrative and operating expenses and increase the taxpayers' share of underwriting gains or losses. The plan released by
USDA would take aim at these same areas and cap the administrative and overhead expenses crop insurance companies can collect and increase the taxpayers' share of underwriting gains and losses from
five percent to 6.5 percent. The plan would cut the deficit by $4 billion over the next ten years.
"The plan laid out by USDA is a great example of what government should be doing across the board--looking at how it is spending money and coming up with ways to save," Feingold said. "Over the last
few years, spikes in crop values have driven government crop insurance subsidies sharply higher and provided a windfall for insurance companies. We can and should maintain this important safety net for
farmers while also protecting the interests of taxpayers. Reforming these subsidies will save taxpayers billions, while still providing farmers with fair premiums and insurance options."
From fiscal year 2006 to fiscal year 2008, crop insurance subsidies increased by $2.1 billion. The recently released proposal from USDA is the third draft after the USDA worked with insurance companies
and other stakeholders.