Crop Insurance Takes a Hit from House Budget

Ryan says more can be saved through further reforms of crop insurance.

Published on: Mar 21, 2012

House Budget Committee Chair Paul Ryan, R-Wisc., released his proposed budget for Fiscal Year 2013 Tuesday. It calls for new reforms to crop insurance and cuts in direct farm payments. The Ryan Plan, already rejected by Senate Democrats, calls for some $30 billion in budget savings from ag reforms including crop insurance and direct payments.

The American Soybean Association had mixed reactions to the Ryan Budget. While ASA President Danny Murphy did praise the proposal for calling for increased development of domestic energy sources, and mentions the potential for nuclear, wind and solar power, he also expressed concern about the cuts to crop insurance.

ASA one of groups concerned about cuts to crop insurance.
ASA one of groups concerned about cuts to crop insurance.

"The cuts that Chairman Ryan proposes are significantly higher than those agreed upon by House and Senate Agriculture Committee leadership during the Super Committee process last fall, and that concerns us," Murphy said. "Especially worrisome is the Chairman's emphasis on the federal crop insurance program as an area for reduction. Crop insurance serves as the main safety net for America's farmers, and its integrity must be protected."

The question of why crop insurance has been asked a lot, when so many ag lawmakers and producers see the program, already having been cut some $12 billion, as the safety net core of the next farm bill.

"Do I think you can get more reform out of crop insurance subsidies? Yes I do," Ryan said. "I also think the bulk of the savings need to come from direct payments, but that is up to the Agriculture Committee to decide exactly how they do that."

That was a point Ryan emphasized and House Agriculture Committee Chair Frank Lucas, R-Okla., stressed in a written statement, after House Agriculture leaders protested last year that they, not Ryan, would write the 2012 Farm Bill.

"We're asking the authorizers, the Agriculture Committee, to decide exactly how to do this," Ryan said. "They are going to have to save, I think it's $33 billion. All the area within the ag title is what the authorizing committee, and Chairman Lucas will have to come up with."

The Agriculture Committees are actually aiming for $23 billion in farm bill cuts right now. Ryan's plan would impose no savings on ag until the start of the next farm bill, thus giving the ag panels more flexibility.

The Ryan Plan cuts the deficit $3 trillion versus the President's budget, reforms taxes and Medicare, dumps health care reform, and seeks a plan to avert 2013 automatic cuts. But it is only a blueprint for spending and would likely have no impact on Senate spending decisions, only House. Ultimately, some bicameral consensus would be needed to implement any reforms.