By Jessica Domel
Field Editor
A deal that was expected to save crop insurance programs from $3 billion in cuts may now be in jeopardy.
According to the American Farm Bureau Federation (AFBF), Senate Minority Leader Harry Reid of Nevada and House Minority Leader Nancy Pelosi of California have indicated they were not part of the agreement House Ag Committee Chairman Mike Conaway announced at the end of October.
That agreement was supposed to save crop insurance from the cuts included in the Bipartisan Budget Act at a later time through an omnibus bill.
The deal appears to have been struck with retired Speaker John Boehner rather than current Speaker Paul Ryan.
After the announcement of a “deal” to save crop insurance, legislators introduced several bills in both the House and the Senate that would strip up to $24 billion from the crop insurance program.
If the bills are passed and crop insurance is cut, farmers and families across the nation will suffer the consequences.
“The last farm bill was over a year ago. Agriculture took about $23 billion in cuts. About the only thing we were going to be able to hold onto, they said, was crop insurance,” TFB President Russell W. Boening said in an interview with the TFB Radio Network. “Now, they’re coming back a year or so later and wanting to go into crop insurance—the one thing we had left, really. Congress cannot balance the federal budget on the back of the American farmer.”
Without crop insurance in 2011 and 2012, many farmers would have suffered much bigger losses. Some would have been forced out of the business altogether without a safety net.
“A blow like that doesn’t just hurt the farmer,” Boening said. “It hurts rural businesses. It hurts industries that depend on agriculture.”
Agriculture as a whole wouldn’t collapse immediately without crop insurance. But it would become much more volatile.
“Whenever you can’t take out deep losses like when you have a drought, the volatility gets to be much more severe,” Boening said. “You will lose operations. You will lose family farms.”
Some experts say that farmers should pay for their crop insurance without government subsidies.
Boening explains that would still create market volatility, which would eventually hurt the American economy.
“Farmers wouldn’t be able to afford it,” Boening said. “There’s no doubt about it. It’s marginal in some areas and on some crops already. If you had to pay the entire premium, you’d go without it. If you went without it, if you had a bad enough year, it would force you to close the doors. We would lose production that we desperately need to feed a hungry world.”
Losing production in one part of the U.S. would affect American agriculture as a whole-especially in difficult crop years. For example, when the Corn Belt suffers from too much or too little rain, the corn growers in Texas and across the South are very important.
Agriculture programs, as a whole, don’t take up much of the federal budget anymore. Proposed cuts to the programs that are left are just additional slashes to an already small piece of the pie.
“I try to explain to them what it costs them in tax money. You can get it down to the average taxpayer pays pennies a day for crop insurance,” Boening said. “I think if the average consumer and taxpayer really studied it, at the end of the day, they would agree it’s a good investment for them.”
Agriculture groups continue to meet with legislators in Washington, D.C. about the proposed cuts.