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Trump Proposes 33% Cut in Crop Insurance
Five weeks after he told the largest U.S. farm group that he supports “a [farm] bill that includes crop insurance,” President Trump asked Congress to slash the taxpayer-subsidized program by a third. The $26-billion cut over a decade was part of a fiscal 2019 budget package that called for the eradication of USDA’s first green payment program and for denial of crop subsidies and land stewardship payments to people with more than $500,000 in adjusted gross income.
The National Sustainable Agriculture Coalition, which represents small farmers, called the package “the most anti-rural, anti-farmer proposal the agriculture community has seen in years.” The budget proposal would reduce funding for agricultural research and for rural economic development, said NSAC, which found the occasional sound reform among a flood of harmful cuts.
In a joint statement, the Republican chairmen of the Senate and House Agriculture committees said, “We are committed to maintaining a strong safety net for agricultural producers during these times of low prices and uncertain markets and continuing to improve our nation’s nutrition programs.” The White House proposal, said Senator Pat Roberts and Representative Michael Conaway, “will not prevent us from doing that job.” Roberts is a stalwart supporter of crop insurance and opposes cuts to it.
Unlike most years, when the White House arranges its schedule to make its budget the story of the day, the Trump administration gave precedence to its ideas for infrastructure spending. Agriculture Secretary Sonny Perdue, on a trip to Nevada, issued a statement in support of infrastructure development and said nothing about the proposed USDA budget.
White House Budget Director Mick Mulvaney rejected the idea that the Trump budget was dead on arrival in a Congress that voted last week to increase federal spending by hundreds of billions of dollars. “This is a messaging document,” he said, adding that the first message is: “You don’t have to spend it all.”
Trump won a standing ovation when he told a friendly farm crowd on January 8, “I’m looking forward to working with Congress to pass the farm bill, on time, so that it delivers for all of you. And I support a bill that includes crop insurance.” It was a sharp change in tone from Trump’s proposal last spring for a 3% cut in crop insurance over 10 years. The proposal for fiscal 2019 covers many of the same points as its predecessor although the details vary somewhat.
In the new document, the White House said the premium subsidy for the so-called Harvest Price Option, the most popular type of coverage, should be reduced 15 percentage points, and the subsidy for all other crop insurance, except for catastrophic coverage, should be reduced 10 points. The government pays 62¢ of every $1 in premiums as well as sharing with insurers the burden of severe crop losses. The White House also proposed a lower guaranteed rate of return for insurers.
Crop insurance is expected to be one of the most controversial issues in the 2018 farm bill.
The budget proposal for USDA also called for a lower rental payment for fragile land idled in the Conservation Reserve Program; elimination of two land stewardship initiatives, the Conservation Stewardship Program and the Regional Conservation Partnership Program; elimination of the Rural Business and Cooperative Service; and large cuts in research funding for the Economic Research Service and the Agricultural Research Service. Conservation Stewardship was the first USDA green payment program.
The National Farmers Union said the budget proposal “reflects a clear misalignment of the government’s priorities compared to the actual needs of the American public.”
The White House budget package is available here.
The USDA budget proposal is available here.