An Obama Administration budget proposal to reduce spending on federal crop insurance drew negative responses from leaders of the House Ag Committee. A committee hearing to review the state of the rural economy was held Feb. 11, just days after the one-year anniversary of the enactment of the 2014 Farm Bill.

President Obama’s fiscal year (FY) 2016 budget proposal for the U.S. Department of Agriculture (USDA) is $23.5 billion in discretionary spending, down from $23.8 billion in actual appropriated discretionary funding for FY 2015. Federal crop insurance programs are an area targeted for cuts.

 

House ag leaders express concern

Both Reps. K. Michael Conaway (R-Texas), Chair, and Collin Peterson (D-Minn.) Ranking Member, expressed concerns over the budget proposal.

According to Conaway, the administration’s fiscal year 2016 proposal reduces federal crop insurance spending by $16 billion over 10 years, a reduction of over 17%. Since the 2014 Farm Bill was enacted, drought and other natural disasters resulted in disaster declarations in 33 states, he noted. 

“With commodity markets plummeting and producers struggling to find financing, now is precisely the wrong time to weaken crop insurance,” he said. “We have a new farm bill on the books that passed with bipartisan support. The President’s proposed cuts to crop insurance, which (USDA Secretary Tom Vilsack) has vocally supported, would undermine the farm bill and make the inherently risky business of growing our nation’s food supply even riskier.  We should recognize the contributions agriculture has made to deficit reduction and give the new farm bill time to work.”

 “With declining commodity prices and weather-related challenges across much of the country, it’s important these new programs are in place,” Peterson said. “Even with the budget savings the new farm bill provided, I remain concerned about attempts to reopen the bill, whether by making changes to crop insurance, SNAP or any other farm bill program. This is a very bad idea and could put everything we worked for in jeopardy. I hope that this committee will remain united in opposition to additional cuts to farm bill programs. Quite frankly, the Agriculture Committee has done our work.”

 

Senate proposal caps premium subsidies

In separate action on Feb. 2, U.S. Sens. Jeanne Shaheen (D-N.H.) and Pat Toomey (R-Pa.) introduced legislation that would cap federal crop insurance premium subsidies at $50,000, which the Congressional Budget Office estimates would reduce the deficit by about $2.2 billion over 10 years.

 

What’s next?

According to the National Sustainable Ag Coalition (NSAC), the budget request kick starts the annual budget and appropriations process. Beginning in March, the various House and Senate appropriations subcommittees will hold hearings to consider the President’s FY 2016 budget request. Then, once the Budget Committees have passed their respective budget resolutions, subcommittees will begin to develop appropriations legislation for each issue area (agriculture, environment, education, etc.) before bringing that legislation before the full Appropriations Committees, and the full House and Senate.

Under normal circumstances, because Congress only takes up the farm bill every five years, there would be no chance for these reform proposals to see the light of day in FY 2016, according to NSAC. However, it is possible Congress will pursue budget reconciliation – a process that instructs certain authorizing committees to make policy changes to reduce the deficit. If House and Senate Agriculture Committees are instructed to make spending cuts, crop insurance reform could be on the table, NSAC concluded.