Senate to Debate Crop Insurance in Farm Bill

The Senate is debating cuts to the federally subsidized crop insurance program as it considers a massive farm bill this week.

The Obama administration said Monday it wants to see more cuts to crop insurance and farm subsidies in the legislation, which would cost almost $100 billion a year over five years and would set policy for farm programs and food aid.

The bill would cut about $2.4 billion annually from overall farm spending. But it would still expand federally subsidized crop insurance and raise some subsidies for rice and peanut farmers. The White House did not specify how large a cut it was seeking.

Almost $80 billion of the annual cost of the bill is for domestic food aid, with most of the rest of the money split between farm subsidies, federal help for crop insurance and programs to protect environmentally sensitive land.

The government spent an estimated $15.8 billion on the program for the 2012 crop year after a drought destroyed many crops, up from $9.4 billion in 2011. The government subsidizes about 62 percent of farmers’ insurance premiums and also subsidizes the insurance companies that sell the policies. The cost of the program has risen in recent years because of bad weather events and record-high crop prices.

The Senate began debating the bill Monday, with Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., saying she expected several amendments to be offered on the crop insurance program. Stabenow and other farm-state senators have argued that crop insurance should be maintained and even expanded because it protects farmers when they need it most and because farmers contribute some of their own money to the program.

Critics say federal contributions to crop insurance are too generous and subsidize big agricultural businesses.

Sen. John McCain, R-Ariz., offered the first crop insurance amendment Monday, proposing an end to $33 million a year in insurance policies for tobacco farmers. A buyout for tobacco farmers enacted nine years ago is phasing out government payments to tobacco farmers, but many of them still receive crop insurance.

“It turns out Joe Camel’s nose has been under the tent this whole time in terms of crop insurance subsidies,” McCain said, referring to a character that used to appear on packs of Camel cigarettes.

Cuts to the food stamp program are also expected to be a contentious issue on the Senate floor.

The administration statement did not say whether President Barack Obama supports $400 million in annual cuts to the food stamp program contained in the Senate bill. The statement said it supports the food stamp program, now known as the Supplemental Nutrition Assistance Program, or SNAP, but did not specifically mention the cuts.

The Obama administration has been stronger in opposing cuts to SNAP in the House farm bill, which are about five times as much as the cuts in the Senate bill.

Agriculture Secretary Tom Vilsack said Monday he was `”eeply concerned” about the House food stamp cuts, which he said would “deny struggling families and their children access to food assistance.”

Though Senate Democrats have generally opposed cutting food stamps, Stabenow included the small cuts in the Senate version of the bill to try to appease House Republicans who say the program is too expensive.

The legislation approved by the House Agriculture Committee last week would cut about $2.5 billion a year, or a little more than 3 percent, from SNAP, which is used by 1 in 7 Americans.

The House legislation would achieve the cuts partly by eliminating what is called categorical eligibility, or giving people automatic food stamp benefits when they sign up for certain other programs. It also would save dollars by targeting states that give people who don’t have heating bills very small amounts of heating assistance so they can automatically qualify for higher food stamp benefits.

The Senate bill, also approved in committee last week, saves money in the food stamp program only by targeting the heating assistance dollars.

While calling for deeper cuts to subsidies, the White House also called for Congress to maintain the strong safety net farmers have now. Current farm programs expire Sept. 30.

“It is critical that the Congress pass legislation that provides certainty for rural America and includes needed reforms and savings,” the White House said.

The Senate passed a similar bill last year, but the House did not consider it.