NU Online News Service, July 18, 2:08 p.m. EDT
Crop-insurance agents are voicing deep concern about a Senate plan to establish a "means test" for crop-insurance premiums that would raise rates for some farmers by 15 percent.
The plan is part of a bill passed by the Senate on June 22 that reauthorizes farm-assistance programs. The provision in question was not included in the House's version of the legislation reported out of the Agriculture Committee last week.
Under the Senate plan, crop-insurance premiums would rise 15 percent for farmers with an adjusted gross income of more than $750,000.
The amendment was sponsored by Sen. Richard Durbin, D-Ill., and Sen. Tom Coburn, R-Okla.
Jennifer McPhillips, a senior director of federal government affairs for the Independent Insurance Agents and Brokers of America, says the IIABA is pleased that the means test was not included in H.R. 6083, the House version of the legislation.
"The IIABA believes that any attempts to limit crop participation and producer eligibility from premium support will have the unintended effects of reducing a producer's ability to secure financing and will increase calls for ad hoc, off-budget disaster assistance," McPhillips says.
The industry was successful in beating back another Senate amendment, proposed by Sen. Jeanne Shaheen, D-N.H. and Sen. Pat Toomey, R-Pa., that would cap crop-insurance subsidies at $40,000 per farmer. Shaheen and Toomey withdrew their amendment before it was voted on.
Crop-insurance subsidies have been cut several times since 2008. Industry officials estimate the total cuts over 10 years at $12 billion through actions in 2008 and 2011.
According to McPhillips, farmers have said "time and time again" that the crop program is their primary risk-management tool, and they feel strongly that it should be preserved.
McPhillips made her comments as AccuWeather.com reports that the ongoing drought is likely to further drive down yields in the United States for 2012.
Tom Zacharias, president of National Crop Insurance Services, the industry's trade association, reassures that crop insurers will have the resources to pay claims amid the challenging conditions. "We've always been there for our farmer customers when they've faced tough times in the past and we'll continue to be there." He says.
The nation's 16 crop insurers will have the money necessary to quickly pay out claims in 2012, even amid record payouts last year, Zacharias states.
There are 18,000 insurance agents servicing 1.15 million crop insurance policies in 2011. There are 16 companies involved in the business.
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