WASHINGTON–Senators gave final approval today to a farm bill after rejecting an amendment that would have cut federal reimbursements to crop insurers by over one-third.
The bill, which now goes to the president for his signature, passed on a 79-14 vote.
Yesterday an amendment was offered by Sen. Sherrod Brown, D-Ohio, that would have reduced the administrative and operating reimbursement rate for crop insurers, which Sen. Brown argued were overly high.
"This amendment is not going to break the backs of those insurers; it is just going to mean slightly less huge profits for those insurers," he said on the Senate floor. "Let's face it, this amendment does not take crop insurers to the cleaners; this amendment takes a little drop from their rather large bucket."
Sen. Pat Roberts, R-Kan., opposed the amendment, arguing that it would effectively kill the crop insurance program and ultimately damage the nation's food supply.
"I am always amazed at the number of people who criticize a program that benefits our farmers and ranchers, some of whom do their speaking with their mouths full," he said.
"It is truly a paradox of enormous irony: Those who enjoy the safest, most affordable food supply in the world, compliments of America's farmers and ranchers, with good intentions or not, do great harm to the very programs that support our producers in providing the bounty that is the modern miracle of American agriculture," he continued.
Sen. Roberts argued further that program would indeed increase the costs of insuring farmers, specifically by increasing the quota share, the amount of underwriting earnings ceded to the government.
"If we do the proposed changes in underwriting gains in this program, we will be ceding additional reinsurance risk from the private market, and it will go to the risk management agency of the USDA–that is the outfit that runs the crop insurance program–and the U.S. taxpayer," he said. "I don't think we want to do that."
The amendment was voted down 63-32.
Among those praising the Senate for rejecting the amendment was the Independent Insurance Agents and Brokers of America.
"The defeat of this amendment was a win for America's farmers," said Robert Rusbuldt, president and chief executive officer of the IIABA. "Independent agents who service our farmers are proud that this risk management tool has protected the farmers of our nation. It was imperative that this amendment be defeated to continue a proven risk management tool for farmers."
The current bill already contains a smaller cut to the administrative and operating (A&O) reimbursement, which the IIABA said it supported to help move the bill through the legislative process. Had the amendment's decrease been added to that, according to IIABA assistant vice president of federal government affairs John Prible, the bill could have dealt a severe blow to the crop insurance market.
The amendment, he said, "would have jeopardized the success of the private delivery of the program by disincentivizing private sector companies and agents to be the sales force."
Mr. Prible added that it "would have likely put private sector employees out of work and resulted in the hiring of new federal employees to serve farmers."
He said it has been proven that private sector delivery is more efficient and results in better service to America's farmers. IIABA is "grateful' the Senate acted "to protect that private sector delivery," Mr. Prible commented.
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