$600 Million
All 16 private insurance companies that participate in a federal crop insurance program have signed off on the new federal reinsurance agreement that cuts the subsidies they get by $600 million a year for the next 10 years. The insurers reluctantly signed the 2011 Standard Reinsurance Agreements (SRA) with an overall $6 billion funding reduction. The USDA has contended that reductions are warranted because crop insurers have been making hefty profits. Industry groups argued that the companies need the subsidies to maintain high reserves in case of widespread crop disasters. The agency says $4 billion of the savings will go toward reducing the federal deficit, while $2 billion will support risk management and conservation programs for farmers.
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