Obama Budget Would Cut Crop Insurance

Feb 10, 2016

Cuts to the crop insurance program will again be a talking point on Capitol Hill.

The budget drafted by President Obama and released Tuesday would make cuts to the crop insurance system, allocate more funds for agricultural research and fund the summer program that provides free meals to children.

The decrease in crop insurance subsidies would amount to a savings of $18 billion over ten years, according to the Department of Agriculture's summary of the budget (PDF). The crop insurance program costs more than $9 billion annually.

"These proposals will modify the structure of the crop insurance program so that it is less costly to the taxpayer, yet still provides a safety net for farmers," the department said in the document. 

U.S. Agriculture Secretary Tom Vilsack told reporters that the proposed cuts to crop insurance are in response to criticism the department faced about possible wasteful spending and fraud.

The proposal, Vilsack said "is a response to the very structures and organizations that Congress has set up and that Congress looks to for improvement in programs."

Republicans in Congress, generally, are uninterested.

Sen. Pat Roberts, a Republican from Kansas and the chair of the Senate's Agriculture Committee, called the measure "dead on arrival." And Iowa Republican Sen. Chuck Grassley, also an Agriculture Committee member, says the real threat will come when the federal government makes new deals with crop insurance companies. 

"I'm more worried not that Congress will cut it," Grassley said, "I'm more worried what might happen when they have renegotiation of contracts, and I'm not sure exactly when that is going to happen. But I'm not worried Congress is going to mess with it."

Obama's budget also includes $1.2 billion for research at USDA's Agricultural Research Service and an increase of about $35 million to address drug-resistant bacteria in humans and livestock.

Obama also proposes to dedicate $12 billion over ten years to create a permanent program designed to continue meal benefits to children from low-income families over the summer when they’re out of school.