National Farmers Union (NFU) has issued the following statement after the Government Accountability Office (GAO) released a report recommending that Congress consider capping premium subsidies for farmers, or reducing support for premiums across the board, or both:
“NFU is supportive of the idea that farm program support be directed to family farmers, and we must remember that the main purpose of farm programs is to help these farmers during difficult times, when prices collapse or when disaster strikes.
“NFU policy calls for a $75,000-per-individual limitation on the cumulative value of all federal premium subsidies for the purchase of ‘buy-up’ crop insurance coverage. The GAO report uses a much smaller cap on premium subsidies, but the concept of limiting support of crop insurance programs is worth further consideration.
“It is evident that the agriculture committees will need to dig deep into their budgets in order to find the cuts likely to be required in the next farm bill. Premium subsidy limits are one way to do that. Congress should also include the Market-Driven Inventory System (MDIS) in the next 2012 Farm Bill. MDIS would have reduced federal costs by approximately 60 percent between 1998 and 2010, according to a study by the University of Tennessee Agricultural Policy Analysis Center. These savings could have been achieved without sacrificing the ability of family farmers to manage risk, as a reduction in insurance premiums would do.”