WASHINGTON (March 5, 2013) — New legislation introduced today in both chambers of Congress would scale back massive federal subsidies for crop insurance, representing a major victory for both taxpayers and the environment, according to the R Street Institute.

Introduced as S. 446 by Sen. Jeff Flake, R-Ariz., and as H.R. 943 by Rep. John Duncan, R-Tenn., the Crop Insurance Subsidy Reduction Act would roll back crop insurance subsidies, which currently account for $62 of every $100 paid in crop insurance premiums, to levels that prevailed before 2001.

The nonpartisan Congressional Budget Office estimates the change would save taxpayers $40.1 billion over the next decade, a period when crop insurance subsidies currently are projected to cost roughly $9.1 billion a year. R Street Senior Fellow Andrew Moylan noted that the cost of federal crop insurance subsidies have exploded in the past decade, going from $1.8 billion in 2001 to $7.5 billion last year.

“What makes the crop insurance program particularly troublesome is that, unlike other agricultural supports, the subsidies are neither means-tested nor subject to conservation compliance requirements,” Moylan said. “The end result is that 26 large agricultural producers each banked more than $1 million in crop insurance subsidies in 2011, while 10,000 received more than $100,000.  Meanwhile, the program encourages farmers to convert to agricultural use that marginal land that is most subject to flood and erosion.”

In a March 5 letter to every member of Congress, R Street joined with a coalition of 17 conservative, libertarian and taxpayer groups to encourage swift consideration of the Flake/Duncan legislation. To read the full letter, please visit:


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