President Obama’s 2014 budget plan, released last week, makes big cuts in two programs important to Indiana farmers. The Obama plan calls for $38 billion in cuts to farm programs over the next 10 years. The cuts come in 3 main areas: direct payments, conservation programs, and crop insurance. While most in agriculture support the elimination of direct payments, the cut in funding for crop insurance is not acceptable. According to American Farm Bureau Federation economist Matt Erickson, “If you look at the president’s proposal, he’s not investing in the crop insurance program. He’s actually taking money away from the crop insurance program, the true safety net for farmers and ranchers.”
Erickson said support for crop insurance by farmers and on Capitol Hill is strong because it just makes sense, and good policy, “The 2012 drought we saw a lot of losses. Farmers and ranchers had no control over the weather. Crop insurance was there. If it was a good year and the farmer or rancher didn’t experience a loss, they wouldn’t get a crop insurance check because within the crop insurance program you have to experience a loss.” Looking at the broader picture, Erickson says, now that all the budget plans are in, be ready for the debt ceiling debate to rear its head again. Remember that last time it came up, we ended up with spending caps and the sequester.
The American Soybean Association also released a strong statement supporting full funding for the crop insurance program. “As ASA has said many times over, soybean farmers are willing to do our part to address the nation’s fiscal challenges, and we have a vested interest in ensuring that the cuts needed are made in a strategic manner, with all potential consequences taken into account. As many farmers still struggle to recover from the worst drought in generations, now is not the time to make such a deep cut to the federal crop insurance program,” said Danny Murphy, ASA President and a soybean farmer from Canton, MS.
Funding for conservation is also supported strongly by Indiana farmers, but Hoosier Senator Joe Donnelly, a member of the Senate Ag Committee, said in order to save crop insurance, cuts may have to be made in conservation programs, “It is a balancing act.” He said those who support conservation may have to accept less government funding for conservation in order to get full funding of crop insurance.
As expected, Secretary of Agriculture Tom Vilsack defended the President’s budget and the cuts it makes in his own department, “It strikes a balance to keep growing our economy and the middle class, while reducing the deficit in a common sense and balanced way.”
Now that the House, Senate, and White House budget plans have been announced, Erickson says the real work of crafting a budget can begin, and that more than almost anything else will determine the future of US farm policy, “Looking at the House budget, the Senate budget and the President’s budget, they’re all platforms for the budget debate. The question is, are we going to take these tools within each budget and how are we going to put the pieces to the puzzle together.”