Congress could achieve significant savings in the crop insurance program by reducing guaranteed payments to insurers and requiring wealthy operators to pay more for taxpayer-subsidized coverage, said the Government Accountability Office on Monday. The reforms could save billions of dollars on a program estimated to cost $101 billion over the next decade.
Row crop and specialty crop growers are eligible for more than $3 billion from the Emergency Relief Program (ERP) to offset losses from natural disasters in 2022, said the USDA. Administrator Zach Ducheneaux of the Farm Services Agency said 2022 "was another year of weather-related challenges — for some, the third consecutive year or more in a row."
The new farm bill will not enacted until next year because of continuing disagreements over issues such SNAP benefits and higher crop subsidies, said Senate Agriculture Committee chair Debbie Stabenow on Wednesday. “I am committed to passing a strong, bipartisan farm bill as soon as possible,” she said, but the process is taking longer than hoped.
Congress could be even later than expected in completing the new farm bill, said two farm policy experts during a webinar on Tuesday, four days before the current law expires. House and Senate Agriculture Committee leaders are now aiming for passage of the 2023 farm bill by the end of December, but closed-door negotiations have moved slowly.
The government would save money and better target the crop insurance system toward small and mid-sized farmers by denying subsidized policies to the wealthiest growers and by limiting the value of premium subsidies to eligible farmers, said Rep. Earl Blumenauer on Tuesday. The restrictions would reduce the cost of crop insurance by an estimated $2.7 billion a year, a quarter of its projected cost over the next 10 years.
Congress should make the wealthiest farmers pay a larger share of the cost of taxpayer-subsidized crop insurance and hold the line on crop subsidies in the new farm bill, said a half dozen think tanks, budget hawks, and environmental groups on Wednesday. “There is no obvious or urgent need to increase farm subsidies,” said Nan Swift of the R Street Institute, despite the appeals of farm groups.
Senate Agriculture Committee chair Debbie Stabenow curtly rejected on Thursday a suggestion to divert climate change funding for agriculture to more generalized soil and water conservation work. “I know that there is a broad coalition of support standing with me,” she said.
Congress should provide a “meaningful enhancement” of crop subsidies and the crop insurance program in light of declining farm income, said Republican staff workers on the Senate Agriculture Committee on Thursday. “Headwinds persist in the U.S. farm economy,” they said in a report, pointing to a slowdown in farm exports, weakening commodity prices, high production costs, and rising interest rates.
Studies have repeatedly shown that federally subsidized crop insurance discourages farmers from updating their practices, tools, or strategies in ways that would help them adapt to climate change — but the federal government still subsidizes a whopping 62 percent of farmers’ insurance premiums.
A decade after the House briefly put the idea into play, a senior Republican on the House Agriculture Committee said the far-ranging farm bill should be divided into two separate pieces of legislation: SNAP and everything else. SNAP, which cost $119 billion last year, has become “an emotional, political issue” that taints consideration of farm supports, said Rep. Austin Scott of Georgia.
Senate Republicans will do their part to smooth the way, but time is already running out for Congress to write the new farm bill, said Senate Republican Leader Mitch McConnell on Thursday. The 2018 farm law expires in four months, and leaders of the Senate and House Agriculture committees have yet to unveil a first-round text for the farm bill, an unusually late start for a time-consuming process.
Two out of three crop and livestock producers say they are uncertain or believe Congress is unlikely to enact a new farm bill this year, said a Purdue University survey on Tuesday. Neither the Senate nor House Agriculture committees has unveiled a preliminary version of the bill or scheduled a bill-drafting session, an unusually slow start.
Higher enrollment in SNAP and lower commodity prices will boost the 10-year baseline for the farm bill to $1.48 trillion, the most expensive ever, said the Congressional Budget Office in an updated projection of federal spending. The baseline sets the limit for spending in the new farm bill. …
The two largest U.S. farm groups stuck to requests for expensive changes in the farm safety net — higher crop subsidy rates and broader access to subsidized insurance — in the face of a warning on Tuesday that the money might not be available. Senate Agriculture Committee chair Debbie Stabenow pointed to proposals that would tie an increase in the federal debt limit to steep cuts in spending.
The farm safety net is often described as a cushion for producers against hard times because crop subsidy payments are counter-cyclical — they become larger as commodity prices decline. The federally subsidized crop insurance program is the largest part of the safety net, but net indemnities are not counter-cyclical, said four agricultural economists on Monday.
If it wants them, Congress should act directly to include goals such as climate mitigation in the farm bill rather than resort to crop insurance "add ons" that could meddle with the soundness of the federally subsidized program, said two analysts on Tuesday. Crop insurance is the largest federal support to agriculture, with an estimated cost of $15.5 billion this year.
After two record-setting years in a row, U.S. net farm income will decline sharply in the near term, pulled down by lower crop and livestock prices, though it will remain well above its 10-year average, said FAPRI on Wednesday. The University of Missouri think tank said food inflation would drop to 4.4 percent this year — less than half of last year’s rate — and run at 2 percent in following years.
Congress needs to modernize the crop insurance program and update farm subsidies to reflect higher input costs and volatile commodity markets when it writes the new farm bill, said the leader of the largest U.S. farm group at a listening session in Texas on Wednesday. An anti-hunger leader asked lawmakers to “keep the importance of access to SNAP and the adequacy of those benefits top of mind throughout farm bill discussions.”
After surging to a record $149 billion last year as part of the federal response to the pandemic, SNAP will cost $121 billion a year in the near term, said the Congressional Budget Office on Wednesday.