Is Crop Insurance on the Budgetary Chopping Block?

05:04PM Mar 15, 2017
( Farm Journal )

As the White House wrestles with balancing a bipartisan budget able to be passed by both the House and Senate, some fear cuts to USDA programs will be a high priority. One of the programs in question is the federal crop insurance program.

Crop insurance, which falls under the umbrella of farm bill spending, has cost the government billions of dollars since its introduction in 1938. Earlier this week, letters were sent to the House and Senate Budget Committees, House and Senate Appropriations Committees, USDA Secretary-Designate Sonny Perdue, and Office of Management and Budget Director Mick Mulvaney explaining the need for a federal program. They urged the inclusion of this program in President Trump’s budget.

The letters, signed by more than 60 agriculture groups, say true crop insurance spending under the 2014 farm bill will come in $20 billion under budget. In addition, the letters’ authors say the federal program helps farmers save money.

“Farmers spend $3.5 to $4 billion per year of their own money to purchase insurance from the private sector,” the letters note. “On average, farmers also must incur losses of almost 30% before their insurance coverage pays an indemnity. Crop insurance allows producers to customize their policies to their individual farm and financial needs.”

The letters explain crop insurance is a risk management tool that has replaced the “constant demand for ad hoc disaster assistance.” The groups involved also argue the farm bill should not be reopened or renegotiated until it expires in 2018.

“Farmers and lawmakers agree that crop insurance is a linchpin of the farm safety net and is crucial to the economic security of rural America,” they conclude.

Groups who have signed these letters include: 

American Agri -Women

American Association of Crop Insurers

American Bankers Association

American Farm Bureau Federation

American Farmland Trust

American Insurance Association

American Malting

Barley Association

American Seed Trade Association

American Sesame Growers Association

American Society of Farm Managers and Rural Appraisers

American Soybean Association

American Sugar Alliance

American Sugarbeet Growers Association

Association of Equipment Manufacturers

Association of Fish and Wildlife Agencies

California Association of Winegrape Growers

Corn Refiners Association

Crop Insurance and Reinsurance Bureau

Crop Insurance Professionals Association

Ducks Unlimited

Farm Credit Council

Florida Sugar Cane League

Independent Community Bankers of America

Independent Insurance Agents & Brokers of America

National Association of Mutual Insurance Companies

National Association of Professional Insurance Agents

National Association of State Departments of Agriculture

National Association of Wheat Growers

National Barley Growers Association

National Corn Growers Association

National Cotton Council

National Council of Farmer Cooperatives

National Farmers Union

National Grain and Feed Association

National Oilseed Processors Association

National Peach Council

National Potato Council

National Rural Lenders Association

National Sorghum Producers

National Sunflower Association

National Young Farmers Coalition

Panhandle Peanut Growers Association

Pheasants Forever

Quail Forever

Reinsurance Association of America

Rio Grande Valley Sugar Growers

Rural & Agriculture Council of America

Southern Peanut Farmers Federation

Specialty Crop Farm Bill Alliance

Theodore Roosevelt Conservation Partnership

United Fresh Produce Association

US Apple Association

US Canola Association

US Dry Bean Council

US Rice Producers Association

USA Dry Pea & Lentil Council

USA Rice

Western Peanut Growers Association

Wildlife Mississippi