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Proposed U.S. budget includes $28 billion cuts to crop insurance over 10 years

Total USDA spending is down about $12 billion

By Diego Flammini
Assistant Editor, North American Content

The United States Department of Agriculture will have about $12 billion less in its 2018 budget compared to 2017, according to a department budget outline.

“There’s no sugar coating what we will face,” Secretary of Agriculture Sonny Perdue said in a video statement on May 23, ahead of a conference call with Acting Deputy Secretary Michael Young and reporters. “USDA will likely see a significant reduction in funding by the time this process is complete.”

The USDA’s budget authority is about $137 billion. The department will have about $7 billion cut from its mandatory budget and another $5 billion from its discretionary budget, according to the outline.

Cuts to the Risk Management Agency are included in the proposed budget.

By targeting crop insurance subsidies for producers with an Adjusted Gross Income of $500,000 or less, establishing a limit of $40,000 for premium subsidies and eliminating the subsidized harvest price revenue coverage, the USDA could save more than $28 billion over 10 years, according to the budget.

“This is all part of an overall package of budget proposals geared at getting the (federal) budget to balance in 10 years while look(ing) out for the interests of taxpayers,” Young told reporters.

But farm organizations are concerned about the cuts to crop insurance and the potential impact on producers.

“Any reduction in the discount for crop insurance will increase the cost of crop insurance to farmers,” David Schemm, president of the National Association of Wheat Growers, said in a May 23 statement. “As commodity prices decline and farmers’ budgets tighten, an increase in the cost of crop insurance is only more likely to result in less participation and higher premiums for all farmers.”

The proposed budget contains “the most extreme proposed cut to crop insurance I’ve seen in my 40 years on the farm,” Ron Moore, president of the American Soybean Association, said in a May 23 release. “This is a program that exists to sustain farmers who suffer catastrophic losses … It’s clear that this budget was written without input from farmers who would be severely affected.”

In total, $47 billion will be cut from USDA programs over the next 10 years and more than 5,000 department employees will be let go, according to the department.

All anyone can do at this point is take a wait and see approach, says Perdue.

“The final form (of the budget) has yet to be determined and my job is to fulfill all of the obligations (the USDA has),” Perdue told reporters during the conference call. “We’ll see what Congress comes up with and we’re going to do whatever it takes to reach the best possible outcome.”

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