Crop insurance: Still a target for deficit reduction?

WASHINGTON, Nov. 4, 2015 - Last week, the crop insurance industry narrowly averted a $3 billion cut when House Agriculture Chairman Mike Conaway struck a deal with Republican leaders shortly before a final vote on a two-year budget bill. But some lawmakers are still pushing for cuts in crop insurance.

The proposed cut to crop insurers remain in the bill, which the House approved 266-167 late Wednesday afternoon, but the provision will be reversed when Congress considers a fiscal 2016 spending bill in December, Conaway said. USDA was supposed to carry out the cut before the end of 2016 by lowering the cap on the insurance companies' rate of return. The $3 billion in savings that the cut was supposed to produce will be found in some other, non-agricultural area of the federal budget.

However, on Tuesday, Senator Jeanne Shaheen, D-N.H., wrote to Majority Leader Mitch McConnell and Minority Leader Harry Reid to request that the new budget agreement’s reforms to the federal crop insurance program not be undone in year-end legislation.

“I am concerned with the reported agreement to roll back these modest reforms, not only because it will increase the deficit, but also because any commonsense efforts to reform the crop insurance program have been stymied by the insurance companies,” she wrote. “Clearly, there is room within this wasteful program to make cuts without hurting protections for farmers, and the reforms in HR 1314 were an important first step. I strongly oppose any attempt to repeal the crop insurance savings from future legislation, including a possible omnibus appropriations bill.”

Senator Charles Grassley, R-Iowa, told Agri-Pulse that he expects to sit down with other members of the Senate Agriculture Committee in the near future to discuss where the cuts will come from but there is no guarantee that agriculture will not be a target. Yet other Senate sources say they expect to follow the House and make cuts from areas outside of the agricultural budget.

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