When the White House unveiled its budget package earlier this week, it proposed a 31 percent cut in crop insurance and called for tighter eligibility rules for farm subsidies. Those changes would save less in 10 years than the administration spent to mitigate the impact of the Sino-U.S. trade war on 2018 and 2019 farm production, said economist Jonathan Coppess of the University of Illinois on Thursday.
“Maybe the most notable aspect of the president’s budget proposal and USDA’s explanation is the juxtaposition” of trade war assistance and the traditional rules for the farm program, wrote Coppess at the farmdoc Daily blog. The trade war assistance, mostly in the form of cash payments to farmers and ranchers through the ad hoc Market Facilitation Program, had a payment limit per farmer that was twice as high as USDA crop subsidies. The administration allowed payments to operators with adjusted gross incomes of $900,000 a year — higher in some instances — but its budget plan asked for a $500,000 AGI limit for crop insurance and farm supports in the future.
“Finally, and arguably most notably, the MFP has spent more in three fiscal years, $28.7 billion, than the president proposes to cut from crop insurance and farm programs over 10 years, $27.6 billion,” said Coppess.
House Agriculture chairman Collin Peterson said the budget was written by ideologues out of touch with farm country. “We will make sure that the farm bill isn’t cut during this year’s budget process,” said the Minnesota Democrat. “What’s worse is the president is proposing all these cuts without any attempt to balance the budget.”