The Hagstrom Report

Agriculture News As It Happens


Crop insurers, NSAC unhappy with budget proposal

SCOTTSDALE, Ariz. — The crop insurance industry reacted negatively to President Barack Obama’s proposed budget that includes cuts to crop insurance programs while the National Sustainable Agriculture Coalition, which could be considered at the opposite end of the political spectrum, found the proposal dull.

Tom Zacharias

Tom Zacharias
National Crop Insurance Services President Tom Zacharias noted that crop insurance was cut by both the 2008 farm bill and the renegotiation of the standard reinsurance agreement.

“Unfortunately, the additional disproportionate reductions being proposed would weaken a crop insurance infrastructure at the very time we need it the most,” Zacharias said. “We fear such reductions would undermine the successful public-private partnership that was specifically designed by Congress to minimize taxpayer exposure to risk.”

In a statement issued during the crop insurance industry convention here, Zacharias noted that the reductions in government spending on crop insurance had amounted to $12 billion while the companies have paid out more than $27 billion in indemnities since 2008.

“Simply put, the crop insurance industry has done more with less,” Zacharias said.

The fiscal year 2013 budget request sent to Congress includes "a smattering" of 2012 farm bill proposals, he said, including the same $32 billion in 10-year farm bill cuts Obama issued last September and a proposed one-year cut to farm bill conservation programs of $432 million.

Ferd Hoefner

Ferd Hoefner
Ferd Hoefner, policy director for the National Sustainable Agriculture Coalition, said, “The Obama farm bill budget cutting proposal is not terribly interesting.”

Hoefner said that, while the proposal would do away with direct payments, it would renew the disaster program that NSAC considers “largely discredited and expensive,” and that the proposed 2 percent cut to farmers’ crop insurance premium subsidies would fall most heavily on small and medium-sized farmers because it is not targeted.

The bill also does not address whether farm subsidies should be tied to conservation requirements, he said, although noting it includes cuts to conservation programs.

“Frankly, the proposals are relatively lame and not at all progressive,” Hoefner noted. “Clearly, all the heavy lifting is left to Congress.”