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Published July 14, 2010, 09:34 AM

Crop insurance companies agree to subsidy cuts

WASHINGTON — All 16 private insurance companies that participate in a federal crop insurance program have signed off on a plan designed to cut their subsidies by $6 billion over the next 10 years.

WASHINGTON — All 16 private insurance companies that participate in a federal crop insurance program have signed off on a plan designed to cut their subsidies by $6 billion over the next 10 years.

The U.S. Department of Agriculture announced the agreements Tuesday.

The USDA’s Risk Management Agency had sought the reductions because it contended the crop insurance companies were making excessive profits. Industry groups had resisted the cuts, saying the companies needed to maintain high reserves in case of widespread crop disasters, but they ultimately accepted the deal.

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.

Farmers’ premiums won’t change.

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