The US Government plans to slash federal subsidies for crop insurance given to both insurance companies and farmers.

The proposal was outlined in yesterday's Budget statement drawn up Presdident Barack Obama's administration.

Several Bermuda insurance companies, including RenaissanceRe and Max Capital, write substantial books of crop insurance in the US.

A document entitled "A New Era of Responsibility", published by the Office of Management and Budget (OMB) yesterday, stated: "Over the last several years, subsidies for crop insurance companies have grown rapidly without improving programme coverage or customer service for farmers.

"Current subsidy levels exceed what is necessary to encourage farmer participation and they do not constitute a sound value to taxpayers."