- freeimages.com/ZGingerFalling crop prices have raised cost projections for the farm bill.
Falling crop prices have raised cost projections for the farm bill.
The Congressional Budget Office (CBO) said annual payments to farmers could average $4.8 billion over the next decade, which is almost 50 percent more than what was predicted less than a year ago, after the 2014 farm bill passed.
Some relief will come for taxpayers because costs for the crop insurance program will be lower. The CBO says there will be a $200 million drop from its past projections for average yearly crop insurance costs.
“History shows there is a close correlation between crop prices, as represented by corn, and the total crop insurance premium and premium subsidies,” Keith Collins, a former chief economist for the Agriculture Department and a consultant now for the crop insurance industry, told Politico. “So when prices drop, as over the past two years, premiums and subsidy costs fall.”
The CBO is projecting a combined annual cost of the Agricultural Risk Coverage program and the price-loss coverage plan to be $4.4 billion, compared with its projection of $2.94 billion in April. Other smaller subsidy programs bring the total to $4.8 billion.