New analysis is coming out about the amendment adopted by the full Senate during debate last week that would apply adjusted gross income (AGI) limits to crop insurance premiums.

The amendment was offered from Sens. Dick Durbin (D-Ill.) and Tom Coburn (R-Okla.) and would reduce the premium subsidy by 15 percent for farmers with AGIs of $750,000 or higher.

Kansas State University agricultural economist Art Barnaby examined how placing means testing on crop insurance would affect the risk pool, agreeing with Senate Agriculture Committee Chairwoman Debbie Stabenow’s (D-Mich.) comments that limiting crop insurance support would cause producers with large pieces of land to leave the insurance system, making the costs rise for the rest of the risk pool.

Barnaby also examined assumptions behind an amendment likely to be offered on the Senate floor next week by Sen. Jeff Flake (R-Ariz.), which would eliminate the harvest price option from the revenue protection contract.

Barnaby explains that crop insurance has provided yield coverage since 1980, but only after the inclusion of the harvest price option in 1996 was there large scale Corn Belt participation in crop insurance.

Ultimately, amendments such as the Durbin-Coburn and Flake amendments will incentivize farmers not to take crop insurance, which is exactly the opposite of what NAWG and most other farmer organizations believe the industry needs.

NAWG strongly supports policies that encourage everyone who wants to take crop insurance to be able to participate in the program, making it more affordable for all growers and helping ensure safe and affordable food for a growing world population.

Links to the reports are at http://www.agmanager.info/crops/insurance/risk_mgt/rm_pdf13/AB_MeansTest.pdf and http://www.agmanager.info/crops/insurance/risk_mgt/rm_pdf13/AB_AvgCI_Loss2.pdf.