Obama crop insurance proposal criticized
February 02, 2015 |06:59 PM
The Obama administration today released an Agriculture budget with few new proposals other than a single food safety agency, but it included a crop insurance proposal from last year.
The administration proposes an Agriculture Department budget of $131 million in mandatory spending, with $25 billion in discretionary spending, for a total of $156 billion in spending.
The inclusion of the proposal to make reductions in crop insurance spending was immediately criticized by the National Farmers Union and Republican members of Congress but praised by the Environmental Working Group and the National Sustainable Agriculture Coalition.
In the main budget document, the administration said “In the last 15 years, the crop insurance program has evolved from a small program with minimal participation to one of the main pillars of farm support.”
“Overly generous benefits have almost eliminated the risk in farming at a cost to taxpayers in the billions. The budget includes reforms that are designed to reduce the distorting aspects of the program while maintaining its place as an insurance program and a key component of the farm safety net.
“Specifically, the budget proposes to reduce the subsidy for the premium on the harvest price protection revenue insurance, and tighten the prevented planting crop insurance rules saving an estimated $16 billion over 10 years.”
Roger Johnson, president of the National Farmers Union, a Democratic-leaning group, praised Obama’s proposal for trying to narrow the gap “between farming and ranching incomes and the rest of the nation” through “meaningful changes to the tax code, investments in rural development programs, and expanded educational opportunities.”
But Johnson added he was disappointed the administration has proposed across-the-board cuts to crop insurance, which he described as “a farmer’s primary risk-management tool.”
“The 2014 farm bill just included $23 billion dollars for deficit reduction, so agriculture has clearly already done its part,” he said.
Johnson urged the administration to look to other parts of the budget for additional reductions.
“When Mother Nature strikes or markets fluctuate, without crop insurance, many family farmers and ranchers could be put out of business,” he said.
Senate Agriculture Committee Chairman Pat Roberts, R-Kan., said, “I have heard repeatedly from farmers in Kansas and across the country that crop insurance is the key tool in managing risks associated with drought, flood, freeze, hail, and other weather events.”
“The president’s budget again turns a deaf ear to our nation’s farmers and ranchers by directly cutting the very tool that helps growers produce a safe and affordable food supply year after year,” Roberts said. “We have seen these types of proposals from this administration before and Congress has been right to ignore them.”
House Agriculture Committee Chairman Michael Conaway, R-Texas, said, “Like a broken record, the president's latest budget proposal calling for higher taxes and more spending doesn’t sound any better to hard-working Americans than it did the first time around. Simply put — this budget will hurt the economy and cost American jobs.”
“Rural America is no exception,” Conaway continued. “Under the president’s proposed tax increases, including the elimination of stepped-up basis, the next generation of young producers would find it harder to take over the family farm or ranch.”
“At the same time, the president's ill-timed proposal on crop insurance would jeopardize the ability of producers to insure their crops in a climate of collapsing crop prices, major crop losses, and falling farm income,” Conaway said.
“These tired proposals for higher taxes and more spending, along with EPA's long list of choke-hold regulations, reflect the agenda of a president who is out of touch with the everyday concerns and lives of working families in rural America.”
The Environmental Working Group praised the crop insurance provision, saying it would “save taxpayers billions of dollars and protect our land and water.”
EWG noted the proposal would cut premium subsidies by 10 percentage points for revenue protection policies and make changes to prevented planting insurance coverage. The prevented planted payouts “encourage farmers to plow up wetlands or plant their crops on other risky and environmentally sensitive land,” EWG said.
“If Congress is serious about reducing the deficit, it needs look no further than the farm subsidy reforms proposed by in the administration’s FY2016 budget,” said Scott Faber, EWG senior vice president for government affairs.
The National Sustainable Agriculture Coalition, which represents small, environmentally-minded farmers, said “We commend the White House for again proposing some degree of crop insurance reform.”
“We hope that future crop insurance reform proposals will be more progressive and far-reaching, but appreciate the topic being put out for debate in a year when farm bill spending cuts could potentially be on the table should Congress adopt a budget reconciliation process later this year that includes agriculture.”
During a budget briefing, Vilsack noted that the administration expects payouts under the Agricultural Risk Coverage and Price Loss Coverage programs to be $1 billion to $1.5 billion higher than anticipated over the next 12 to 18 months, because commodity prices are projected to be low.
But he said the current period of low prices should not be compared with the farm crisis of the 1980s because prices have not dipped as much and the safety net program is in place.
Vilsack also emphasized that the administration remains concerned about the aging of farmers and wants to use its beginning farmers and ranchers program to help younger farmers gain a foothold.
The administration is again proposing that Congress establish a fund to pay for control of forest fires on the grounds that the current system of taking money out of other programs to fight forest fires hurts the U.S. Forest Service’s ability to work toward long-term forest health and fire suppression, Vilsack said.
Vilsack said the fiscal year 2016 budget is below the fiscal year 2010 budget, which was the first full budget that the Obama administration proposed. Half the discretionary budget, he noted, is composed of food safety, rental assistance, the special nutrition program for women, infants and children known as WIC, fire suppression and forest management.
▪ Office of Management and Budget — Fiscal Year 2016 Budget of the U.S. Government
▪ Department of Agriculture — FY 2016 Budget Summary and Annual Performance Plan for Department of Agriculture
▪ — USDA FY 2016 Budget Highlights
▪ — Department of Agriculture Fact Sheet on President’s 2016 Budget
The administration proposes an Agriculture Department budget of $131 million in mandatory spending, with $25 billion in discretionary spending, for a total of $156 billion in spending.
The inclusion of the proposal to make reductions in crop insurance spending was immediately criticized by the National Farmers Union and Republican members of Congress but praised by the Environmental Working Group and the National Sustainable Agriculture Coalition.
In the main budget document, the administration said “In the last 15 years, the crop insurance program has evolved from a small program with minimal participation to one of the main pillars of farm support.”
“Overly generous benefits have almost eliminated the risk in farming at a cost to taxpayers in the billions. The budget includes reforms that are designed to reduce the distorting aspects of the program while maintaining its place as an insurance program and a key component of the farm safety net.
“Specifically, the budget proposes to reduce the subsidy for the premium on the harvest price protection revenue insurance, and tighten the prevented planting crop insurance rules saving an estimated $16 billion over 10 years.”
Roger Johnson, president of the National Farmers Union, a Democratic-leaning group, praised Obama’s proposal for trying to narrow the gap “between farming and ranching incomes and the rest of the nation” through “meaningful changes to the tax code, investments in rural development programs, and expanded educational opportunities.”
But Johnson added he was disappointed the administration has proposed across-the-board cuts to crop insurance, which he described as “a farmer’s primary risk-management tool.”
“The 2014 farm bill just included $23 billion dollars for deficit reduction, so agriculture has clearly already done its part,” he said.
Johnson urged the administration to look to other parts of the budget for additional reductions.
“When Mother Nature strikes or markets fluctuate, without crop insurance, many family farmers and ranchers could be put out of business,” he said.
Senate Agriculture Committee Chairman Pat Roberts, R-Kan., said, “I have heard repeatedly from farmers in Kansas and across the country that crop insurance is the key tool in managing risks associated with drought, flood, freeze, hail, and other weather events.”
“The president’s budget again turns a deaf ear to our nation’s farmers and ranchers by directly cutting the very tool that helps growers produce a safe and affordable food supply year after year,” Roberts said. “We have seen these types of proposals from this administration before and Congress has been right to ignore them.”
House Agriculture Committee Chairman Michael Conaway, R-Texas, said, “Like a broken record, the president's latest budget proposal calling for higher taxes and more spending doesn’t sound any better to hard-working Americans than it did the first time around. Simply put — this budget will hurt the economy and cost American jobs.”
“Rural America is no exception,” Conaway continued. “Under the president’s proposed tax increases, including the elimination of stepped-up basis, the next generation of young producers would find it harder to take over the family farm or ranch.”
“At the same time, the president's ill-timed proposal on crop insurance would jeopardize the ability of producers to insure their crops in a climate of collapsing crop prices, major crop losses, and falling farm income,” Conaway said.
“These tired proposals for higher taxes and more spending, along with EPA's long list of choke-hold regulations, reflect the agenda of a president who is out of touch with the everyday concerns and lives of working families in rural America.”
The Environmental Working Group praised the crop insurance provision, saying it would “save taxpayers billions of dollars and protect our land and water.”
EWG noted the proposal would cut premium subsidies by 10 percentage points for revenue protection policies and make changes to prevented planting insurance coverage. The prevented planted payouts “encourage farmers to plow up wetlands or plant their crops on other risky and environmentally sensitive land,” EWG said.
“If Congress is serious about reducing the deficit, it needs look no further than the farm subsidy reforms proposed by in the administration’s FY2016 budget,” said Scott Faber, EWG senior vice president for government affairs.
The National Sustainable Agriculture Coalition, which represents small, environmentally-minded farmers, said “We commend the White House for again proposing some degree of crop insurance reform.”
“We hope that future crop insurance reform proposals will be more progressive and far-reaching, but appreciate the topic being put out for debate in a year when farm bill spending cuts could potentially be on the table should Congress adopt a budget reconciliation process later this year that includes agriculture.”
During a budget briefing, Vilsack noted that the administration expects payouts under the Agricultural Risk Coverage and Price Loss Coverage programs to be $1 billion to $1.5 billion higher than anticipated over the next 12 to 18 months, because commodity prices are projected to be low.
But he said the current period of low prices should not be compared with the farm crisis of the 1980s because prices have not dipped as much and the safety net program is in place.
Vilsack also emphasized that the administration remains concerned about the aging of farmers and wants to use its beginning farmers and ranchers program to help younger farmers gain a foothold.
The administration is again proposing that Congress establish a fund to pay for control of forest fires on the grounds that the current system of taking money out of other programs to fight forest fires hurts the U.S. Forest Service’s ability to work toward long-term forest health and fire suppression, Vilsack said.
Vilsack said the fiscal year 2016 budget is below the fiscal year 2010 budget, which was the first full budget that the Obama administration proposed. Half the discretionary budget, he noted, is composed of food safety, rental assistance, the special nutrition program for women, infants and children known as WIC, fire suppression and forest management.
▪ Office of Management and Budget — Fiscal Year 2016 Budget of the U.S. Government
▪ Department of Agriculture — FY 2016 Budget Summary and Annual Performance Plan for Department of Agriculture
▪ — USDA FY 2016 Budget Highlights
▪ — Department of Agriculture Fact Sheet on President’s 2016 Budget
