Harvest Price Option

Three weeks after President Trump boasted of protecting crop insurance in the 2018 farm bill, the White House proposed a 31 percent cut in the federally subsidized program on Monday. The cuts, part of the administration's budget package for fiscal 2021, were proposed — and rejected by lawmakers — in previous years.

Five weeks after he told the largest U.S. farm group that he supports "a [farm] bill that includes crop insurance," President Trump asked Congress to slash the taxpayer-subsidized program by a third. The $26-billion cut over a decade was part of a fiscal 2019 budget package that called for the eradication of USDA's first green-payment program and for denial of crop subsidies and land stewardship payments to people with more than $500,000 in adjusted gross income.

As Congress expanded the role of crop insurance over the past couple of decades, the cost of the federally subsidized program tripled, to $9 billion annually over the past five years. The Congressional Budget Office says that if lawmakers are worried about costs, they could alter the program to cut outlays by 25 percent or more, with the likely consequence of reducing participation in the largest program in the farm safety net.

As Congress prepares to write a new farm bill, President Trump proposed a 36-percent cut in the federally subsidized crop insurance program over the coming decade, a far more sweeping set of reforms than what was proposed during the Obama era and rejected by farm-state lawmakers. Crop insurance is the largest of USDA's farm support programs at nearly $8 billion a year.

Farm groups will be hard-pressed to avoid cuts in the federally subsidized crop insurance program during work on the 2018 farm bill, said lobbyists from the two largest U.S. farm groups. One of the lobbyists, Mary Kay Thatcher, of the American Farm Bureau Federation, said her analysis of lawmakers' leanings suggested it will be easier to persuade Congress to pass the farm bill than to stop amendments that cut crop insurance.

Leaders of the Senate and House Agriculture committees quickly rejected the Obama administration's proposed $18-billion cut in the federally subsidized crop-insurance program.

The Obama administration seems sure to propose cuts in the federally subsidized crop insurance program in its final budget package, which will be released on Tuesday.

An industry group called crop insurance a key part of the financial safety net for farmers, and asked lawmakers to reject a proposal to slash the program by one-fourth.

Farm-policy reformers in Congress want to rein in the costs of the most popular, and most expensive, part of the federally subsidized crop insurance program: revenue policies with the so-called Harvest Price Option (HPO).