NACIA Washington Update -- President's Budget Cuts Crop Insurance
February 26, 2009
Today President Obama has released his Fiscal Year (FY 2010) Budget Request. This document is a request to Congress, outlining the Administration’s priorities and spending plan, should Congress appropriate the money. Being a new Administration, this Budget Request is not as lengthy or detailed as some previous, but rather an approximately 143 page document accompanied by relatively top line numbers.
In this Budget Request the President has proposed to cut the crop insurance program to achieve some of the savings. The budgetary tables accompanying the request indicate that $2.05 billion is intended to be taken from the crop insurance program over the next five years, through a reduction in premium assistance and underwriting gains, as well as an increase in fees. In the request, the President states the following regarding crop insurance, under the heading of Pursuing Fiscal Responsibility:
“Reduce Crop insurance Premium Subsidies and underwriting Gains.
This proposal would reduce the Federal subsidy to both insurance companies and farmers. Over the last several years, subsidies for crop insurance companies have grown rapidly without improving program coverage or customer service for farmers. Current subsidy levels exceed what is necessary to encourage farmer participation and they do not constitute a sound value to taxpayers.”
While the actual levels of cuts to crop insurance will be up to the Congressional Appropriators, this indicates that the crop insurance program continues to be a target and to be considered as a source of funding for other things, as opposed to the essential safety net it really is. We will need to work diligently to increase awareness of the program’s value and to maintain and increase support.
We will continue to keep you updated on this matter, and please let us know if you have any questions.
Below please find the Department of Agriculture “Funding Highlights” from the Budget Request, indicating other priorities from the Administration.
Brent W. Gattis
NACIA Washington Representative
DEPARTMENT OF AGRICULTURE
Funding Highlights:
- Provides over $20 billion in loans and grants to support and expand rural development activities, including small businesses, renewable energy, and telecommunications.
- Includes a $50 million increase to address deferred maintenance on the most critical health and safety infrastructure within our national forests.
- Supports the implementation of a $500,000 commodity program payment limit. The payment limit will help ensure that payments are made to those who most need them.
- Reflects the President’s commitment to wildfire management and community protection by fully funding suppression costs at the 10-year average, establishing a discretionary contingent reserve for wildfires, and including program reforms to ensure fire management resources are focused where they will do the most good.
- Fully funds the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) to serve all eligible individuals.
- Includes $1 billion per year for the Child Nutrition reauthorization.
- Supports a pilot program to help increase senior participation in the Supplemental Nutrition Assistance Program.
- Reflects the President’s commitment to supporting independent producers through improved enforcement of the Packers and Stockyards Act and investing in the full diversity of agricultural production, including organic farming and local food systems.
- Reflects the President’s commitment to fiscal responsibility by reducing direct payments to the largest farmers, reducing crop insurance subsidies, eliminating cotton storage credits, eliminating funding for the Resource Conservation and Development program, and reducing program funding for overseas brand promotion.
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