EDITORIAL: Reform crop insurance

Feb. 28--Congress created crop insurance in 1938 to help protect farmers and U.S. food production from the sort of natural and financial calamities that crushed farmers during the Great Depression.

Now, the Department of Agriculture administers more than 2 million individual policies each year, covering nearly 300 million acres of farmland.

But the program has not kept pace with the evolution of the agriculture industry. Republican Sen. Pat Toomey of Pennsylvania and Democratic Sen. Jean Shaheen of New Hampshire are on the mark with their reform bill, the Assisting Family Farmers through Insurance Reform Measures Act.

Because of the ongoing conversion of agriculture from family farms to big agri-business industrial farms, taxpayer-funded crop insurance premium subsidies increasingly go to huge businesses that don't need the help. The program also guarantees huge profits to insurers.

"This is nothing more than corporate welfare," Toomey said.

The AFFIRM Act would:

--Limit crop insurance subsidies to $40,000 per farmer, per year, putting the program in line with limits in other farm subsidy programs. Some agri-business companies have received up to $1 million a year in public funds to help them pay for crop insurance premiums.

--Eliminate insurance premium subsidies for individuals with adjusted gross annual incomes over $250,000.

--Reduce USDA costs for the program from $1.5 billion to $900 million per year.

--Reduce federally guaranteed insurer profits from 14.9% to 8.9% per year.

--Require detailed annual reporting on all entities that receive subsidized crop insurance.

The changes reflect the realities of the modern industry. Congress should pass them.

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