Cutting the Safety Net: Farmers Expected to Suffer Under Crop Insurance Cuts in 2019 Budget Proposal
In May of 2017, President Trump and his administration released their budget blueprint for the 2018 fiscal year. It proposed a budget cut that could hinder the crop insurance industry. In February 2018, the Trump Administration came forward again with their new budget outline for the fiscal year of 2019. It asked Congress to cut the USDA’s Conservation Stewardship Program, which incentivizes farmers to use good water, soil, and animal conservation practices, by a third: about $26 billion over the next decade. This cut would eliminate the taxpayer-subsidized program and reduce the average premium subsidy for crop insurance to 48 percent from it’s current standing at 62 percent. It would also “limit commodity, conservation and crop insurance subsidies to those producers that have an adjusted gross income of $500,000 or less.”
What does this budget mean for small farmers?
This is an issue for crop insurance programs as insurance is essential for farmers, especially farmers with smaller operations. Crop insurance helps protect them from underperforming crops and this will be greatly affected by the budget cut.
This budget cut caused controversy as just a few weeks prior to this proposed budget cut, Trump had given his full commitment to leave the subsidies dealing with crop insurance, stating that he supports a farm bill which includes crop insurance. According to the National Sustainable Agriculture Coalition, “The President’s FY 2019 budget request is the most anti-rural, anti-farmer proposal the agriculture community has seen in years.” They state that pretty much everyone in rural America will be affected by this budget cut, not just farmers and ranchers.
What officials and experts are saying
Senator Pat Roberts (R-Kan.) is a supporter of crop insurance and has opposed cuts in the past. He stated, “I did get the backing of the President of the United States for that about two or three weeks ago, and we were able to convince the president it was a very valuable and needed program.” He want on to say he plans to “hold [Trump] to his word.” Michael Conaway, a representative of the Republican chairmen of the House Agriculture committee gave a joint statement with Pat Roberts, stating his commitment to providing financial safety for farmers during the fluctuating market and improving national nutrition programs.
With this new budget, the Trump Administration is hoping to optimize and improve crop insurance programs while still maintaining a strong safety net. However, DTN’s Ag Policy Editor Chris Clayton started an article released the same day as the proposed budget with: “Farmers would pay a larger share of crop-insurance premiums and a range of ag industries would have to pony up fees for USDA services under the Trump administration’s latest budget proposal released Monday, February 12.”
More Information
This proposed budget plan for the fiscal year of 2019 will have a large impact on the agriculture industry. Family farmers and ranchers will be affected the most, but it also extends to everyone who “depends on a safe, abundant, and sustainable food system.” If you would like more information on this topic, The White House budget package is available here and the USFA budget proposal is available here. Talk to a local crop insurance provider, like Crop Insurance Solutions, to find out how this change could impact your specific operation.