The provision is projected to cut slightly more than $3 billion from crop insurance over eight years stretching from 2018-2025 by essentially requiring USDA to renegotiate the Standard Reinsurance Agreement with crop insurance companies in 2016.
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U.S. Senator Joni Ernst (R-Iowa) says she doesn’t intend to vote in favor of the two-year budget congressional leaders and the White House has scripted out. “But it’s a big enough problem that already the people who crafted the deal are saying, “Well, it’s something we’ll have to work out later this year”, Blunt told reporters in a conference call Wednesday morning. “Let’s have the fights we need to have”.
Farm groups and lobbyists for the crop insurance industry cited that the industry has seen $12 billion in cuts to projected spending since the enactment of the 2008 farm bill.
“Mother nature can really throw a bridge into it, hail wind storms and if we didn’t have insurance backing us up it would be very hard to keep us in business”, said farmer Dan Hannapel whose wife also has a crop insurance firm.
Hawkins says the rate of return for those companies “hasn’t been that great anyway”. If that fails, there would be an effort to soften the cut in coming weeks when House and Senate appropriators negotiate the details of a fiscal 2016 spending bill, he said.
The crop insurance cuts, which would come over 10 years, are achieved by cutting the rate of return for insurers from 14.5 percent to 8.9 percent.
He said that chipping away at crop insurance could mean that farmers have to depend on Congress to approve emergency spending for farmers when they suffer large-scale losses. “The House Agriculture Committee was not consulted regarding any changes to policies under the jurisdiction of our committee”. In turn, they increased federal support for crop insurance.
“Make no mistake, this is not about saving money”. Top Democrats on the agriculture panels also objected to the reduction in funds for crop insurance.
“This provision is opposed by an overwhelming majority of our committee members”, Mr. Conaway said. House Agriculture Committee chairman Michael Conaway (R., Texas) thanked his colleagues for making it clear over the last 24 hours that the attempt to gut crop insurance was not acceptable. “To target the No. 1 priority for producers with additional cuts will undermine the delivery of this important protection for agriculture”.
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The federal government can not turn its back on farmers now, especially with record rains in many parts of the state.
