Shaheen seeks big cuts in crop insurance subsidies

Calling farm subsidies “wasteful” and a boon for insurance companies, U.S. Sen. Jeanne Shaheen, D-N.H., proposed to set income eligibility limits to ensure the taxpayer aid only went to low and moderate-income farmers.

Shaheen’s Assisting Family Farmers through Insurance Reform Measures (AFFIRM) Act would limit giving individual farmers any more than $40,000 in crop subsidies each year and end them for any business that nets more than $250,000 annually.

The proposal would also cut by 40% the administrative costs guaranteed to insurance companies that provide crop insurance to farmers.

This would slice the guaranteed rate of return given to insurers from 14.5%-to-8.9%.

“I’m proud to introduce common sense legislation that would protect vital support for New Hampshire farmers without keeping taxpayers on the hook for wasteful subsidies to insurance companies and large agri-businesses that don’t really need the help,” Shaheen said in a statement.

“By enacting long-overdue reforms, we can save taxpayers billions of dollars while fueling a resilient agricultural economy.”

The farm lobby, with the support of powerful legislators of both parties from the states that benefit most, have blocked similar reform attempts in the past.

If approved, the changes would save taxpayers $40 billion over the next decade, Shaheen said.

A coalition of groups backing the bill includes Taxpayers for Common Sense, R Street, the Taxpayers Protection Alliance, the National Taxpayers Union, the Environmental Working Group and the National Sustainable Agriculture Coalition.

The crop insurance program cost $17 billion in 2022 and, unlike other agriculture subsidies, it has no income or annual payment limits.

This provides a federal subsidy for more than 60% of the cost of the premium for each insurance policy along with guaranteed profits for the insurance industry.

According to the Environmental Working Group, a non-profit advocacy organization, New Hampshire farmers -- at $7.5 million -- got the third lowest amount of these crop insurance subsidies from 1995-2023.

Only farmers in Rhode Island ($1.6 million) and Alaska ($1.5 million) received less benefit during that period.

All New England states were in the bottom 10 of states in the U.S., with Maine ($140 million, 40th) the highest in the region.

The top seven states receive 52% of these subsidies led by Texas ($14 billion), North Dakota ($12 billion), South Dakota ($9 billion), Iowa and Kansas ($8.8 billion each).

Shaheen’s bill would also get rid of taxpayers paying for price option insurance that gives farmers more subsidy if the crop’s price at harvest proves to be higher than the price insured for at the time of planting.

The bill requires the reporting of all individuals or entities that receive federally subsidized crop insurance.

In contrast to other farm subsidy programs, the public does not know who gets these crop insurance benefits.

Shaheen has worked with many in the New England delegation in the U.S. House and Senate to lobby for better crop insurance benefits for apple growers in the region.

Last year in response to that advocacy, the U.S. Department of Agriculture’s Risk Management Agency halted changes that Shaheen and her colleagues argued would have harmed New England farmers.

Unlike in past years that Shaheen has sought this reform, no Senate Republicans have yet signed onto this latest proposal.