Farm interests across the spectrum of agricultural activity are criticizing a proposed budget deal that threatens the last remaining safety net for many farmers.
Under the proposal, the Agricultural Act of 2014 would be reopened and crop insurance subsidies would be subject to severe cuts, undermining the framework on which the farm bill was built.
“Make no mistake, this is not about saving money — it is about eliminating Federal Crop Insurance,” said House Agriculture Committee Chairman Michael Conaway, R-Texas. “The House Agriculture Committee was not consulted regarding any changes to policies under the jurisdiction of our committee. This provision is opposed by an overwhelming majority of our committee members.
‘It was debated and defeated during the 2014 farm bill process, and to move forward with it now breaks faith with the American producer,” Conaway said. “I am working alongside many of my colleagues to have the provision removed. If it is not removed, I will vote against this bill and work to defeat its passage. The American people deserve better than continued backroom deals struck in the middle of the night that entirely undercut the legislative process.”
Senate Agriculture Committee Chairman Sen. Pat Roberts, R-Kan., along with Ranking Members Sen. Debbie Stabenow, D-Mich., and Rep. Collin Peterson, D-Minn., also expressed displeasure at the proposal.
UNITED AGAINST REOPENING
In a joint statement, they said, “Members of Congress stand united against reopening the 2014 farm bill to further cuts.” They emphasized that the proposed cuts to crop insurance in the budget agreement would undermine a critical risk management tool for American agriculture producers and consumers.
“Farmers and ranchers have done more than their fair share to reduce government spending,” said Sen. Roberts. “To target the No. 1 priority for producers with additional cuts will undermine the delivery of this important protection for agriculture. While Congressional leaders may sell this package as providing budget stability, it is anything but stable for farmers and ranchers. It took years to negotiate and pass a new farm bill.
“Producers have signed contracts and purchased policies,” Roberts said. “These proposals to make further cuts to the crop insurance program were not included in the House or Senate-passed budgets, in any appropriations bills, or in the President’s budget request. Once again, our leaders are attempting to govern by backroom deals, in which the devil is in the details. I will continue to oppose any attempts to cut crop insurance funding or to change crop insurance program policies.”
For the latest on southwest agriculture, please check out Southwest Farm Press Daily and receive the latest news right to your inbox.
Sen. Stabenow agreed: “I oppose any efforts to cut or reopen farm bill programs. It is particularly disappointing to see cuts to crop insurance in the budget agreement. “These types of cuts only undermine the economic certainty that the farm bill provides. The farm bill made meaningful reforms to help reduce the deficit. Any attempts to reopen any part of the farm bill to more cuts would be a major setback for rural America and our efforts to create jobs.”
“We made major cuts when we wrote the farm bill,” said Rep. Peterson. “It is not appropriate to cut agriculture again. The farm bill should not be raided. I oppose any cuts.”
FARM GROUPS WEIGH IN
Farm associations also criticized the proposal. A statement released by the National Association of Wheat Growers (NAWG) said the bipartisan budget deal would both raise discretionary spending caps for fiscal years 2016 and 2017 and it would increase the debt limit until March 15, 2017. “This budget agreement could have significant negative impacts on agriculture,” said NAWG President, Brett Blankenship, a wheat grower from Washtucna, Wash.
“NAWG is very opposed to these provisions that would be devastating to the crop insurance companies, and ultimately for growers as well. In this difficult economic climate, at a time when commodity prices are low, agriculture has already taken a hit. We took unprecedented cuts in negotiating the farm bill. Just one year into the new farm bill, Congress let sequester cuts happen, and now they want to cut more. We cannot stand by and allow more cuts to be made,” Blankenship said.
The sticking point is a provision, Title II, that would require the U.S. Department of Agriculture to renegotiate the Standard Reinsurance Agreement, the agreement between the Risk Management Agency and the crop insurance companies to administer the federal crop insurance program, by December 31, 2016, and that the agreement establish a target rate of return for the approved insurance providers of 8.9 percent of retained premium for each of the 2017 through 2026 reinsurance years, resulting in $3 billion in cuts.
National Corn Growers Association President Chip Bowling, a corn farmer from Newburg, Md., issued the following statement in response to a proposed $3 billion cut in crop insurance support as part of a national budget deal.
“Slashing the federal crop insurance program is bad policy. The 2014 farm bill provides farmers with a critical safety net, the cornerstone of which is the federal crop insurance program. Cuts to the crop insurance program will lead to fewer insurance providers and agents, and that means fewer choices for farmers to manage their risk.
“This deal is yet another attempt to reopen the farm bill, despite major reforms and $23 billion in budget savings. Agriculture remains the only industry that has voluntarily accepted spending reductions. We stand with Chairmen Roberts and Conaway and Ranking Members Stabenow and Peterson in defending the farm bill and calling on Congress to remove these cuts.
“We urge all farmers to contact their elected officials immediately. Tell them that if cuts to federal crop insurance are not removed, they must vote no on the budget bill.”
In an action alert released yesterday, the National Cotton Council urged farmers and others in the industry to contact members of Congress and express their disappointment over the budget provisions that affect agriculture.
The alert stated: “A provision in the just announced two-year budget agreement would require USDA to renegotiate the Standard Reinsurance Agreement with crop insurance companies and reduce the target rate of return to 8.9 percent resulting in savings of $3 billion. The National Cotton Council strongly opposes this provision as we believe it would cripple the private sector delivery system and result in company consolidation. Likewise, this provision is strongly opposed by House and Senate Ag Committee leadership.
“You are requested to promptly contact your House of Representative member/delegation and Senators and request that they work with the House and Senate Agriculture Committee leadership to strike this provision or oppose the agreement if this provisions remains in the bill. Phone calls to ag legislative assistants are recommended form of contact. This legislation could come before the House as early as Wednesday morning and subsequently to the Senate. Therefore please make House contacts first followed by Senate. Contact information is included on the NCC website (www.cotton.org).”