Crop Insurance Targeted in Budget Cuts

While Congressional leaders may sell this package as providing budget stability, it is anything but stable for farmers and ranchers. It took years to negotiate and pass a new Farm Bill. Producers have signed contracts and purchased policies. John Hoeven and Heidi Heitkamp and Rep. Kevin Cramer all say the 2014 farm bill strengthened crop insurance, and the proposed budget deal undermines that. Once again, our leaders are attempting to govern by backroom deals where the devil is in the details. “Just one year into the new farm bill and Congress let sequester cuts happen”. “It is about eliminating Federal Crop Insurance”, said Chairman Conaway. Now, we’re facing another three $3 billion in cuts. She says those serving on the United States Senator Committee on Agriculture, Nutrition and Forestry were not consulted about that cut. “I don’t think this is what Americans want”, according to Ernst. “As far as I’m concerned that Farm Bill was a contract. I probably will not be supporting this deal”.

For too long, our federal crop insurance program has done too much to benefit crop insurance companies and the biggest farm businesses and too little to help small farmers manage the ups and downs of agriculture. The agreement also would raise the nation’s debt limit through early 2017.

The National Association of Wheat Growers, The Crop Insurance and Reinsurance Bureau, National Crop Insurance Service and American Association of Crop Insurers are all opposing the reported budget deal. “That’s not the right approach”.

Rep. Pete Sessions of Texas, chairman of the powerful Rules Committee, told CNN he was “seriously” weighing opposing the deal. “No”, Abraham said. “But I’m going to do everything I can to make sure the president and the Republican leadership keep their word and fix this problem that they created”. At least that’s what it looks like to commodity groups and others involved with agriculture. “I oppose any cuts”.

Congress got rid of other types of subsidies in a wide-ranging farm bill previous year, including payments that went to farmers regardless of crop yield or crop price. She praised the deal a “small but positive step forward”. Additionally, the bill calls for a cap of 8.9% on the amount that crop insurance companies can earn on retained premiums for the 2017 to 2026 reinsurance years.

The national crop insurance industry is highly critical of the agreement. With numerous larger companies exiting from the crop insurance business over the previous year with the current ceiling, the drop in potential earnings for these companies may cause most if not all of them to exit the crop insurance business.