The Obama administration has cited increases in crop insurancesubsidies as one of the reasons it has threatened to veto the “FarmBill.”

In a statement, the administration said it “strongly opposes”the bill, the Federal Agriculture Reform and Risk Management Act of2013, which is up for a final vote in the House on June 20.

Authorizing for the current farm subsidy program ends Oct.1.

The administration said it would veto the bill if presented tothe president because it reduces the food stamp program, and “doesnot contain sufficient commodity and crop insurance reforms,” amongother concerns.

The veto statement said the administration objects to the cropinsurance provisions because, rather than reducing crop insurancesubsidies by $11.7 billion over 10 years, as proposed in thepresident's budget, the bill would increase reference prices forfarmers by roughly 45 percent and “increase already generous cropinsurance subsidies at a cost of nearly $9 billion over 10 years tothe nation's taxpayers.”

Both the House and Senate have proposed expanding crop insurancesubsidies in their versions of the bill. A number of farm-stateSenate seats will be up for grabs in next year's elections.

Democrats are joining Republicans in proposing expansiveincreases in farm programs while cutting the food stamp programsbecause Democrats want to hold onto their seats.

The nonpartisan Congressional Budget Office said that while theHouse bill would increase federal spending on crop insurance by$8.91 billion over the next decade, the Senate bill would increasecrop insurance subsidies by $4.98 billion over 10 years.

R.J. Lehmann, a senior fellow at the R Street Institute, aconservative think tank, said, “While pitched by its sponsors asthe more 'fiscally responsible' of the two bills, largely due toits projected $20.5 billion in cuts to the Supplemental NutritionAssistance Program, the House bill actually calls for even largerincreases in corporate welfare to mega-farms.”

Congress is acting despite a report last month, which arguesthat in many cases it allows growers to make more money frominsurance payouts than they would from a healthy harvest.

This is particularly so for the industrial-scale operationswhich have been enjoying record profits, the report says.

There are 17 crop insurers. These include Wells Fargo, ACE Ltd.,XL Group, Everest Re Group and Starr International.

The 15 private insurance companies that sell the policiesreceive a total of approximately $1.3 billion annually from thegovernment, which also backs the companies against losses.

According to the latest data, the government now subsidizesapproximately 62 percent of the crop insurance premiums, and theprogram generally guarantees 75 to 85 percent of a farmer'sincome.

Lehmann said the House bill includes generous increases in theSupplemental Coverage Option, which covers up to 90 percent of afarmer's crop revenue when elected in combination with aconventional policy.

The Senate bill has strong support from the IndependentInsurance Agents and Brokers of America. The Senate bill eliminatesthe $5 billion a year in direct payments and places more of anemphasis on the Federal Crop Insurance Program (FCIP) as theprimary risk management tool for America's farmland.

The IIABA was particularly pleased that under the Senate bill,the FCIP will get renewed emphasis.

“As the exclusive sales force of the FCIP, independent insuranceagents are uniquely skilled at helping farmers and ranchers makeimportant risk management decisions about their coverage,” saidRobert Rusbuldt, IIABA president & CEO.