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    An Open Letter to the United States Congress: Support the Crop Insurance Subsidy Reduction Act!

    FreedomWorks has signed onto the following coalition letter in support of the Crop Insurance Subsidy Reform Act:

    Dear Member of Congress,

    On behalf of the millions of Americans represented by the undersigned organizations, we write to urge your strong support of S. 446 and H.R. 943, the “Crop Insurance Subsidy Reduction Act,” sponsored by Sen. Jeff Flake (R-AZ) and Rep. John Duncan (R-TN), respectively. This common sense legislation would scale back crop insurance premium subsidies, the cost of which has skyrocketed in recent years, to the more responsible levels that prevailed prior to a massive expansion in 2000. In doing so, it would provide a modest down payment on desperately needed fundamental reforms to U.S. agricultural policy.

    In 2011, taxpayers paid an average of $62 out of every $100 in crop insurance premiums, with farmers only needing to cover the remaining $38 out of pocket. This extraordinarily generous subsidy has led to extremely high costs for taxpayers. Unlike several other agriculture subsidies, crop insurance premium subsidies are not means-tested or otherwise substantially limited, which is why 26 large agribusinesses received more than $1 million each just to subsidize their crop insurance premiums in 2011, and more than 10,000 received in excess of $100,000. From 2001 to 2012, the total cost of premium subsidies jumped four-fold from $1.8 billion to $7.5 billion. The Congressional Budget Office projects even higher costs in the future, averaging $9.1 billion annually.

    Limiting these subsidies to the levels that prevailed in 2000 would essentially reverse the aforementioned ratio, with taxpayers covering an average of $37 out of every $100 in premiums and farmers covering the remaining $63. Even a modest reform like this yields huge savings, as CBO estimates the Crop Insurance Subsidy Reduction Act would reduce the burden on taxpayers by $40.1 billion over the next decade.

    Given near-record commodity prices, near-record farm incomes, and staggering fiscal challenges, the time has never been better for serious farm policy reform. Agricultural subsidies long have been criticized by watchdog groups and members of Congress from across the ideological spectrum. Though we’d like to see premium subsidies eliminated entirely, the time has come to address some of the “lowest-hanging fruit” in the federal budget and the Crop Insurance Subsidy Reduction Act is a terrific first step.

    We commend Sen. Flake and Rep. Duncan for their leadership and urge you to sponsor this important legislation and support swift action on it.

    Sincerely,

    Andrew Moylan
    R Street Institute

    Phil Kerpen
    American Commitment

    James Valvo
    Americans for Prosperity

    Grover Norquist
    Americans for Tax Reform

    John Tate
    Campaign for Liberty

    Jeff Mazzella
    Center for Individual Freedom

    Chris Chocola
    Club for Growth

    Fran Smith
    Competitive Enterprise Institute

    Rob Sisson
    ConservAmerica

    Mattie Duppler
    Cost of Government Center

    Tom Schatz
    Council for Citizens Against Government Waste

    Matt Kibbe
    FreedomWorks

    Mike Needham
    Heritage Action for America

    Seton Motley
    Less Government

    Duane Parde
    National Taxpayers Union

    Ryan Alexander
    Taxpayers for Common Sense

    David Williams
    Taxpayers Protection Alliance