Will Crop Insurance Face Cuts in Upcoming Federal Budget?

February 9, 2016 05:00 AM
Will Crop Insurance Face Cuts in Upcoming Federal Budget?

The federal crop insurance program faced scrutiny in 2015, and many policy analysts expect the same this year. “Be aware: Crop insurance will be in the cross hairs again,” said Roger Bernard, a policy analyst with Informa Economics. “It’s the low-hanging fruit that seems to be the place (where) most anti-subsidy folks are focusing their attention.”

Last fall, a bipartisan budget deal included unexpected cuts of $3 billion to the federal crop insurance program, which, after great outcry, were rolled back in December through the highway bill. 

Bernard suggests farmers pay close attention to the administration'ss 2017 budget proposal, which is scheduled to be released Tuesday. 

“We (Informa Economics) are told the Obama budget that is to be released on February 9, will contain proposals to cut crop insurance,” Bernard says. “Be aware, agriculture, because (crop insurance) is still going to be the focus for budget cutters.”  


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Spell Check

Rushville, OH
2/9/2016 08:21 AM

  It is obvious that the ultimate goal of the current administration is more government control. Wean the private insurance companies profits to the point it doesn't make it feasible to sell any longer. Then turn it over to Farm Service Agency to administer. Just remember the CAT program in the 90's. They handled that so well.

Western, NE
2/9/2016 09:49 AM

  Depends upon if they're going to cut the program to the farmer or the Return on Investment (ROI) to the insurance company. Currently, I think the ROI back to the insurance companies is a guaranteed 14%!! That's a darn good return. Personally, I wouldn't mind crop insurance being handled through FSA. I wouldn't have to constantly reconcile my records between FSA and my insurance agent since the data that RMA provides my agent always lags a couple of years behind FSA. As farmers, we need to voice our concerns that crop insurance is maintained to the farmer. Whether it's provided by an agent or by the FSA in the end is irrelevant. Some of those agents would be absorbed by FSA to administer the program.

Rochester, MN
2/9/2016 10:18 AM

  The return to insurance companies is gross rather than net. So all the costs associated with running a company payroll,tech, office, etc come out of that number. So 14% gross return becomes 5 or 6 net at best.


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