Trump budget proposes massive cut to crop insurance

Trump budget proposes massive cut to crop insurance | Insurance Business

Trump budget proposes massive cut to crop insurance
President Donald Trump has proposed a 36% cut in the federally subsidized crop insurance program over the next decade, according to a report by Agriculture.com. The Trump cuts are far more sweeping than what was proposed and rejected by lawmakers during the Obama administration.

Crop insurance, the largest of the USDA’s farm-support programs, costs about $8 billion a year, according to Agriculture.com.

The White House also said it would eliminate the USDA’s rural economic development program and streamline conservation programs in an effort to eliminate $46.5 billion in agricultural program costs.

However, crop insurance cuts would account for the largest chunk of savings – $16.2 billion by limiting the government’s share of crop insurance premiums and $11.9 billion by eliminating the harvest price option, according to Agriculture.com. The harvest price option protects farmers against crop losses if the harvest-time price is higher than the price guaranteed at planting time. About 80% of crop insurance policies carry the option, according to Agriculture.com.

Currently, the government pays about 62 cents for every $1 in crop insurance policies. Trump’s plan would limit the total crop insurance subsidy to $40,000 per year and prohibit people with an adjusted gross income of more than $500,000 per year from getting subsidized crop insurance. Together, the two proposals would reduce or eliminate the subsidies for large, wealthy growers, Agriculture.com reported.

Farmers’ groups – whose members voted overwhelmingly for Trump because of his support for corn-based ethanol and campaign vows of regulatory and tax relief – slammed the proposal.

“The president’s proposed budget is an assault on the programs and personnel that provide vital services, research, and a safety net to America’s family farmers, rural residents and consumers,” said Roger Johnson, president of the National Farmers Union.


Related stories:
Nonprofits praise, farm groups critique Heritage report
Insuring Hawaiian crops is about much more than pineapples