The Hagstrom Report

Agriculture News As It Happens

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Obama administration proposal for crop insurance cuts

Here are the crop insurance cuts that the Obama administration proposed in late 2011. The numbers are probably out of date since the cost of the program has risen from $8 billion to at least $9 billion and there have been some changes in administration and premiums.

  • Streamline the administrative costs of the program by lowering crop insurance companies’ rate of return to meet the 12 percent target, saving $2 billion over 10 years.
  • Cap administrative expenses at $0.9 billion adjusted annually for inflation, which would save $3.7 billion over 10 years.
  • Price the premium for catastrophic coverage policies more accurately, saving $600 million over 10 years.
  • Shave two basis points off any coverage premium subsidy levels that are currently offered above 50 percent, saving $2 billion over 10 years.