President Trump’s proposed budget could force farmers to pay more for crop insurance.
The administration is revising the federally subsidized insurance program, with a planned 12% cap on underwriting gains to insurers. By placing a cap, it would lead to savings of $25.7 billion over 10 years.
However, the decision to put a cap on the subsidy program would force farmers to pay a larger share of crop insurance premiums – 52% instead of 38%.
The White House said in its 150-page summary that through the cuts, it would optimize crop insurance and farm subsidies by “eliminating subsidies to higher-income farmers and reducing overly generous crop insurance premium subsidies to farmers and payments made to private-sector insurance companies.”
The federal government also plans to cut farm program benefits from individuals with an adjusted gross income above $500,000 a year. Currently, the program’s cutoff is individuals earning $900,000 AGI.
Source – https://www.insurancebusinessmag.com