OMAHA (DTN) -- Congress appears to have agreement on a five-year highway bill, but the people dancing the most over a bill to lay asphalt may be the crop insurance industry.
The conference report for the highway bill includes a provision that eliminates the $300-million-a-year cut in crop insurance that was part of the budget deal last month. Members of the House and Senate Agriculture Committees pushed congressional leaders to find a way to avoid and eliminate the cut to crop insurance, which would have totaled $3 billion over 10 years.
The highway bill does not include any offset measures for crop insurance, but simply included a provision repealing section 201 of the Bipartisan Budget Act of 2015 -- the language of the budget act that authorized USDA to lower the rate of return for crop insurers.
The crop insurance industry rejoiced over the announcement. The Crop Insurance and Reinsurance Bureau (CIRB), American Association of Crop Insurers (AACI) and the National Crop Insurance Service (NCIS) issued a joint statement. "The crop insurance industry fully supports efforts to return crop insurance to where it was before the budget bill was passed. The budget bill contained a disastrous provision that would have devastated crop insurance as we know it today, harming U.S. farmers and taxpayers alike," the insurance lobbies stated.
The insurers added, "Crop insurance is a successful public-private partnership that has already sustained $12 billion in cuts since 2008. The likely result of additional cuts would be increased industry consolidation, reduced choice in insurance providers for all farmers, and a dramatic decline in the availability and service of policies. Make no mistake -- this cut would jeopardize effective private-sector delivery of crop insurance and take risk management for farmers in the wrong direction."
Insurers had pointed to industry consolidation and the risks of more companies getting out of crop insurance when the White House and congressional leaders struck a deal in late October on a budget. The plan would have lowered the rate of return for crop insurers from 14.5% to 8.9%.
House Agriculture Committee Chairman Michael Conaway, R-Texas, thanked House Speaker Paul Ryan, R-Wis., and Majority Leader Kevin McCarthy, R-Calif., for following through on their commitment to eliminate the insurance cut. "I hope my colleagues in Congress will lend their strong support in ensuring that the Highway Bill conference report is enacted into law and that crop insurance is saved," Conaway said.
The highway bill itself is called the "Fixing America's Surface Transportation Act, or FAST Act. The bill would spend more than $200 billion over five years on surface transportation projects and another $48 billion on mass transit. The bill would effectively convert a larger share of funding over to state and local block grants for transportation projects. The bill also would streamline environmental reviews for major road or transit projects.
The highway bill does not increase gasoline or diesel taxes paid at the pump. The conference agreement instead takes $51.9 billion out of the Treasury for highway funds over five years and another $18.1 billion for mass transit.
Lawmakers also reauthorize the Export-Import Bank in the highway bill, despite the push from some groups to end the bank. The Ex-Im Bank is used by companies to get low-interest financing for exports.
Chris Clayton can be reached at Chris.Clayton@dtn.com
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