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Bills introduced to eliminate harvest price crop insurance option

 

Bills introduced in both the House and Senate would eliminate a price floor subsidy option in crop insurance plans.

Introduced by Senators Jeff Flake of Arizona and Jeanne Shaheen of New Hampshire, the Congressional Budget Office says the Harvest Price Subsidy Prohibition Act would cut the crop insurance program by more than $21 billion. A similar bill has been introduced by Representative John Duncan of Tennessee.

The harvest price option gives farmers the ability to lock in a price floor for crop prices during February and October. While it did not pay out this season, farmers last year with the option did benefit when fall prices for corn and soybeans were higher than in the spring.

USDA could still offer the option to farmers, but they would need to pay a full insurance premium on the coverage.

Flake and Shaheen also introduced bills that would limit crop insurance profits which would lower the rate of return for crop insurance companies from 14.5 percent to less than nine percent.

The senators proposed similar measures in 2015.