Today, President Trump released his FY 2020 budget proposal. In it, he proposes a 15% cut to the U.S. Department of Agriculture. Within that decrease in funding are steep cuts to the federal crop insurance program. The budget proposes to cut crop insurance by nearly $26 billion over the next 10 years.
There are three ways that the budget proposes to cut crop insurance. First, it would reduce the average premium discount for producers to 48% (currently at 62%). This is projected to save $22.1 billion over 10 years. Second, it would cap the target rate of return at 12%. This is projected to save $2.9 billion over 10 years. Lastly, it would limit crop insurance eligibility to farms with an adjusted gross income (AGI) of less than $500,000. This is projected to save $641 million over 10 years.
Crop insurance is the cornerstone of the farm safety net. During a time of depressed prices in rural America, now is not the time to slash the federal crop insurance program, which so many farmers and ranchers rely on to stay afloat. This budget proposal would make crop insurance unaffordable and unavailable for many people. Furthermore, a 5-year Farm Bill with strong support for crop insurance was just signed into law in December.
PIA National strongly opposes any cuts to the federal crop insurance program and will work with the House and Senate to make sure that these cuts proposed in the President’s budget do not make it through Congress. We urge Congress to reject these cuts and to support a strong federal crop insurance program that recognizes the vital role that independent insurance agents play in the delivery of the program.