You are here
Trump Asks for 31% Cut In Crop Insurance
Farmers would pay a far larger share of crop insurance premiums — 52 percent instead of the current 38 percent — under the fiscal 2020 budget proposed by President Trump on Monday. The White House also wants to deny farm program benefits to people with an adjusted gross income above $500,000 a year vs. the current cutoff of $900,000 AGI.
The administration’s revisions to the federally subsidized insurance program, which include a proposed cap on underwriting gains to insurers, would total $25.7 billion over 10 years, or a 31 percent reduction from CBO’s estimate of crop insurance outlays in the decade ahead.
The cuts are similar in scale to Trump’s proposals for fiscal 2018 and 2019. Congress shrugged off those proposals and may again. “This budget was concocted by a bunch of ideologues who can’t see what’s clearly going on in the farm economy,” said House Agriculture chairman Collin Peterson after listing proposals to cut crop insurance, land stewardship and rural energy programs. “The good news is this budget is going nowhere in Congress.”
“I expect the president to be fully on board,” said Texas Rep. Michael Conaway, when it comes to supporting farmers and rural America. Conaway is the senior Republican on House Agriculture.
The National Farmers Union said Trump has proposed cuts in important USDA programs for three years in a row without consideration to the sharp decline in farm income since the collapse of the commodity boom in 2014. “Major relief is needed to weather these tough times in agriculture.”
In a 150-page summary of the budget, the White House said it would optimize crop insurance and farm subsidies by “eliminating subsidies to higher-income farmers and reducing overly generous crop insurance premium subsidies to farmers and payments made to private-sector insurance companies.” Its package would reduce the average subsidy for crop insurance policies to 48 percent from the current 62 percent, “limit crop insurance eligibility to $500,000 AGI” and cap underwriting gains at 12 percent.
Also, the White House said it would “tighten commodity payment limits, including an unnecessary and separate payment limit for peanut producers, and limiting eligibility for commodity subsidies to one manager per farm.” Senate Finance chairman Charles Grassley tried, and failed, to include the “one manager” rule in the 2018 farm bill.
The White House said it would save $1.3 billion over 10 years with the $500,000 AGI limit and $1.35 billion by tightening commodity payment limits and closing loopholes.
The Conservation Reserve would be targeted to environmentally sensitive land under the White House budget, with limits on enrollment of entire fields. Peterson has said the large tracts are needed in the reserve for wildlife habitat.