Companion bills have been introduced in the House and the Senate that would change revenue insurance policies offered under the Federal crop insurance program, stripping the premium subsidy for the harvest price coverage portion of the policy. S. 2096, the “
Harvest Price Subsidy Prohibition Act” was introduced by Senators Flake (R-AZ) and Shaheen (D-NH). In the House, HR 4305, the “Harvest Price Subsidy Prohibition Act” was introduced by Rep. John Duncan, Jr. (R-TN-2). It has no cosponsors. The text of the legislation is not yet available, but previous versions have changed the policy so that only the yield part of the policy would be subsidized, with farmers paying the full price of the revenue portion.
Critics argue that the harvest price option could be replicated in the private market, so there is no need to subsidize it through crop insurance. Farmers have made clear that revenue coverage that excludes the harvest price coverage is not worth buying.
Out of 1.5 million soybean revenue policies sold in 2017, only 9,111 took the harvest price exclusion. That is less than 1%. Of the many proposals to cut crop insurance spending, eliminating harvest price coverage creates the single biggest savings. It would reduce the cost of the program from about $8 billion/year to about $6 billion/year – savings are calculated at more than $2 billion/year. This savings comes not only because farmers would pay more premium, but also because of the high number of farmers who would be expected to stop buying crop insurance altogether.