USDA: New crop insurance plan will save $6B over 10 years; $4B will go to deficit reduction
By Steve Karnowski, APThursday, June 10, 2010
USDA says new crop insurance plan will save $6B
MINNEAPOLIS — The U.S. Department of Agriculture has released the final draft of a new crop insurance plan it says will save the federal government an estimated $6 billion over 10 years.
Agriculture Secretary Tom Vilsack told reporters during a conference call from Washington on Thursday that $4 billion of the savings will go toward deficit reduction. He says $2 billion will be used to expand farm risk management programs and the Conservation Reserve Program, which pays landowners to take environmentally sensitive land out of production.
The USDA had argued that crop insurance companies were making excessive profits. The industry’s return in 2009 was 26.4 percent.
Vilsack says the new plan projects the long-term return for the companies at about 14.5 percent.
