Legislation has been introduced in both the House and Senatethat would severely slash crop-insurance subsidies.

The bills seek to roll the subsidies back the subsidies topre-2001 levels.

The bills are S. 446, sponsored by Sen. Jeff Flake, R-Ariz., andH.R. 943, introduced by Rep. John Duncan, R-Tenn.

Supporters and the R Street Institute, a free-market think tankbased in Washington, say current crop-insurance subsidies accountfor $62 of every $100 paid in crop-insurance premiums.

R Street Senior Fellow Andrew Moylan says the cost of federalcrop-insurance subsidies have exploded in the past decade, goingfrom $1.8 billion in 2001 to $7.5 billion last year.

He says the nonpartisan Congressional Budget Office estimatesthe change would save taxpayers $40.1 billion over the next decade,a period when crop-insurance subsidies currently are projected tocost roughly $9.1 billion a year. 

"What makes the crop-insurance program particularly troublesomeis that, unlike other agricultural supports, the subsidies areneither means-tested nor subject to conservation-compliancerequirements," Moylan said.

"The end result is that 26 large agricultural producers eachbanked more than $1 million in crop-insurance subsidies in 2011,while 10,000 received more than $100,000," he said. "Meanwhile, theprogram encourages farmers to convert to agricultural use thatmarginal land that is most subject to flood anderosion." 

Officials of the National Crop Insurance Service, based inOverland Park, Kans., which represents underwriters, declinedcomment.

The number of insurers in the market has shrunk as both theObama and Bush administrations have moved to cut subsidies since2008.

However, Starr Indemnity & Liability Company, a unit ofStarr International, which is controlled by Maurice "Hank"Greenberg, recently became the 17^th insurer to enter themarket. Another new entrant is is XL, based in Dublin. The largestare companies controlled by Wells Fargo and Ace Ltd.

An estimated 18,000 insurance agents sell this product,according to industry statistics. 

"The current U.S. fiscal crisis makes a strong argument for acommonsense rollback of crop-insurance subsidies," Flake said inannouncing he had introduced the bill.

"I'm proud to have the support of Congressman Duncan inintroducing this legislation, which offers an opportunity to havetaxpayer-funded federal farm subsidies more realistically reflectour current fiscal situation."

 "The crop-insurance program has turned into a hugetaxpayer-funded boon for some of the biggest, multi-nationalinsurance companies and multi-millionaire farmers," Duncansays.