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Trump Cuts Crop Insurance: PIA Opposed

Posted By Administration, Tuesday, May 30, 2017

President Trump’s just proposed budget has a cut of $46.54 billion for agriculture programs and $855 million in the budget for the Department of Agriculture. One of the cuts — and one that concerns PIA National, independent insurance agents and many others in insurance — is in crop insurance.

That cut is a 36% over the next 10-years.

PIA is opposed to the cuts and calls them too “steep.” Jon Gentile — vice president of government relations for PIA National — said the administration’s budget proposes a $28.56 billion cut to crop insurance over the next 10 years. The cuts come in the form of premium assistance caps at $40,000, an adjusted gross income (AGI) limit for crop insurance of $500,000 and elimination of the harvest price option (HPO) for crop insurance.

“These proposed cuts and caps would not only hurt farmers and the agricultural community, but they would also harm the independent insurance agents who work diligently to sell and service crop insurance policies on behalf of the Federal Crop Insurance Program. Attacking farmers' most important risk management tool only weakens the farm safety net and threatens our nation's economic and agricultural stability,” he said.

PIA urges members of Congress to oppose cuts to crop insurance during the appropriations and legislative process.

What’s surprising to many in the industry is Trump’s cuts being even more draconian than those offered up by the Obama administration. And it is unacceptable to National Farmers Union president Roger Johnson whose membership enthusiastically supported candidate Donald Trump for his support of ethanol-based corn growing and other agriculture issues important to the group.

“The president’s proposed budget is an assault on the programs and personnel that provide vital services, research, and a safety net to America’s family farmers, rural residents and consumers,” Johnson said.

American Soybean Association President Ron Moore put it this way. “It’s clear that this budget was written without input from farmers who would be severely affected,” he said.

Agriculture.com estimates the cost of crop insurance at about $8 billion a year. It also says the Trump cuts will do away with the USDA’s rural economic development program and will “streamline” conservation programs. The savings will total — as noted earlier — $46.54 billion in a decade.

The crop insurance cuts will be $16.2 billion with $11.9 billion coming from the elimination of the harvest price option. It comes into play if the harvest-time price is lower than when the crop is planted.

About 80% of crop insurance policies contain that option.

As it stands now, the federal government takes care of .62 cents of every $1 in crop insurance policies. As noted earlier by PIA National, the Trump plan limits the total to $40,000 per year. It also changes subsidies and says those with an adjusted gross income of more than $500,000 a year will not be able to get subsidized crop insurance.

What it effectively does is do away with subsidies for large, wealthy growers.

The Department of Agriculture will see the elimination of 5,263 jobs. Department Secretary Sonny Perdue said there’s no “sugarcoating” that the cuts are needed and it will impact 5% of the workforce.

The agriculture budget failed to resonate with farmers groups, insurers and the PIA and it also failed to resonate in Congress. The Senate Agriculture Committee’s Chairman Pat Roberts and House Agriculture Committee Chairman K. Michael Conway — both Republicans — issued a joint statement saying they “will fight to ensure farmers have a strong safety net.”

The Senate Agriculture Committee’s ranking Democrat Sen. Debbie Stabenow said the cuts will “leave our farmers, families, and rural communities vulnerable in tough times.”


Source links: PIA National, The Hill, Insurance Business America, Carrier Management

Tags:  crop insurance  Insurance Content  Insurance Industry  Insurance News  Trump  Trump Cuts Crop Insurance: PIA Opposed  Weekly Industry News 

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