Ag Policy Blog

Crop Insurance Cuts Could Put Budget Deal in Jeopardy

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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The crop-insurance provision in the budget deal could be the agreement's undoing as a groundswell of resistance grew throughout Tuesday.

Drama heightened last night as a congressional reporter for FOX, Chad Pergram, tweeted that House Rules Committee Chairman Jeff Sessions, R-Texas, wasn't ready for his committee to take up the budget proposal.

‏@ChadPergram -- Rules chair Sessions says there has to be "resolution" over CBO score & maybe crop insurance bill before moving fwd on budget bill

Politico reported just shortly after that House Republicans were trying to round up votes "as dozens of GOP lawmakers are telling leadership they might vote against the package because of changes to crop insurance programs, and other concerns." http://dld.bz/…

Ag-state lawmakers, farm groups and the crop-insurance industry were flexing their muscles Tuesday to push back against plans to cut $3 billion from crop-insurance companies over eight years.

The budget bill would reverse a provision in the farm bill and effectively require USDA to renegotiate the Standard Reinsurance Agreement with crop insurance companies in 2016. The bill also sets a hard cap of 8.9% as the overall rate of return crop-insurance companies can receive. Under current law, the overall rate of return is 14.5%.

The bill doesn't make any changes in crop insurance the cost of policies or protection levels for farmers.

Several congressmen and senators took to social media to vent as details about the budget plan made the rounds on Tuesday.

Sen. Heidi Heitkamp, D-N.D., ‏@SenatorHeitkamp -- See statement on how I'm looking 4 path to prevent cuts to #cropinsurance & avoid reopening #FarmBill in #BudgetDeal http://1.usa.gov/…

Senate Ag Chairman Pat Roberts, R-Kansas, ‏@SenPatRoberts -- I will oppose the budget deal. Farmers should not be forced to shoulder the nation's financial burdens. http://goo.gl/…

The battle immediately raised the profile of crop insurance in the budget arguments with Republicans loudly defending higher spending for a government program.

Roberts, along with Sen. Debbie Stabenow, D-Mich., House Ag Chairman Michael Conaway, R-Texas, and Rep. Collin Peterson, D-Minn., issued a joint statement, "Ag Committee Leaders State United Against Reopening Farm Bill to New Crop Insurance Cuts."

Rep. Kevin Cramer, R-N.D., placed the blame for the crop-insurance provision on the White House with the "intent to re-open the Farm Bill and create a single payer 'Obamacare of Crop Insurance,' " which Cramer said was unacceptable. Cramer then stated he was "committed to working with House Agriculture Committee Chairman Mike Conaway and his committee to find the $3 billion in savings in other areas of the government."

Rep. Randy Neugebauer, R-Texas, also issued a statement that included, "While this is unacceptable, it is of particular concern for cotton producers in my district as crop insurance is now the sole means of risk management available. Furthermore, the House Agriculture Committee was not even consulted during this process, and the Committee has overwhelmingly rejected similar proposals at every recent occasion—America’s farmers deserve better."

The controversy will likely shake out Wednesday as House and Senate leaders examine whether they have the votes for the bill or not.

Follow me on Twitter @ChrisClaytonDTN.

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andrew mohlman
10/30/2015 | 9:03 AM CDT
We're have you been living that only grows in this country they get more farmers less we have so much
CRAIG MOORE
10/28/2015 | 11:46 AM CDT
With the economy being so robust and unemployment so low, couldn't they take some money out of the SNAP program. With so many more out there working now, shouldn't the need for $80 billion a year be declining?