NU Online News Service, June 20 1:33 p.m.EDT

The Senate last night rejected an effort to further slashfederal subsidies to the National Crop Insurance Program.

By a 33-66 vote, the Senate rejected an amendment to S. 3240,the farm bill, offered by Sen. Kirsten Gillibrand, D-N.Y.

S. 3240, the “Agriculture Reform, Food and Jobs Act of 2012,” isaimed at reauthorizing farm program for five years. It wouldauthorize the expenditure $970 billion on federal agricultureprograms and proposes to cut expenditures by $23.6 billion over thenext decade.

The amendment voted down by the Senate would have stripped theFederal Crop Insurance Program (FCIP) budget baseline by $5billion, leading to a 37 percent reduction in Administrative andOperating (A&O) funds, and would have reduced the overallprogram cap to $825 million.

The A&O fund is partly used to pay agents' commissions onthe sale of crop insurance. According to testimony at a recenthearing, there were 18,000 crop agents servicing 1.15 millionpolicies in 2011.

The cuts would have been on top of subsidy cuts imposed throughthe 2008 farm bill, which the new legislation will replace, as wellas changes in the Standard Reinsurance Agreement agreed to underpressure by the crop insurers in 2011.

Industry officials estimate the total cuts over 10 years at $12billion through the 2008 and 2011 actions.

“At a time when farmers are being asked to rely on cropinsurance even more as their primary risk management tool, it seemsirresponsible to further deplete the crop program of its criticalresources,” according to Charles Symington, senior vice presidentof government affairs for the Independent Insurance Agents andBrokers of America.

“The IIABA is pleased that the Senate has recognized howimportant this risk-management tool is for farmers and ranchersacross the country and applauds the strong bipartisan voterejecting this amendment.”