The Obama administration’s 2017 budget proposal includes reforms to the crop insurance program that would end up costing farmers more.
Two specific changes are proposed – one would reduce subsidies for revenue insurance policies that insure the price at the time of harvest and the second would reform prevented planting coverage, including removing optional buy-up coverage. According to USDA, the two changes would save $18 billion over 10 years.
Agriculture Secretary Tom Vilsack saysthe cuts were proposed again this year, after being defeated last year by Congress, in part due to criticism of the prevented planting program in particular. “We also believe, that this is a balanced partnership between taxpayers, farmers and insurance companies,” said Vilsack during a conference call with reporters on the budget. However, he notes that taxpayers are funding around 62% of the premium under some of the programs. “We think it makes more sense in a partnership that it should be closer to 50-50,” he said.
Senate Agriculture Committee Chairman Pat Roberts says the budget proposals “are essentially dead on arrival” in Congress. “The President is hitting rural America where it hurts most, and all of this is occurring at a time when farm income is projected to decline 56 percent in the past three years,” said Roberts.
Agricultural organizations say they will fight the proposed cuts. “ With three consecutive negative farm income forecasts, we simply cannot afford to undercut the farm safety net,” said National Farmers Union president Roger Johnson. “NFU urges Congress to reject these crop insurance cuts, as it has in years past.”
“Our policy has always been that we will strongly and absolutely oppose any attempt to target farm bill programs for additional cuts, and it goes without saying that we will continue to fight proposed cuts to the farm safety net,” said American Soybean Association president Richard Wilkins.