Page 53 - Farm Bill Series_The 7 Things You Should Know

Pros: It is the biggest source of money in the commodity title.

Cons. It is expected to be the most popular commodity program in the new farm bill.

-Cut EQIP and CSP to fund conservation. Congressional appropriators certainly don’t have
any problem dipping into the two programs on an annual basis through CHIMPS. Trimming one
or the other, or both, could be used to shore up CRP and ACEP.

Pros. They are large pots of money.

Cons. Both programs enjoy wide support among farms of all sizes and descriptions. Plus, EQIP
cost-share payments have benefitted livestock and fruit and vegetable operations that don’t
participate in traditional commodity programs.

-Cut crop insurance. Former President Obama’s annual budgets provided several ways to
reduce crop insurance. However, farm groups, banks and the crop insurance industry
successfully fought to prevent the reductions from being enacted.

Still, crop insurance critics are likely to revisit changes. Farmers need to buy crop insurance out
of their own pockets and have “skin in the game,” but the amount of premium paid is subsidized
by about 62 percent nationally. Critics argue that premium subsidies could be reduced –
especially for some of the nation’s largest growers. The supplemental revenue insurance
products, STAX and the Supplemental Coverage Option, could also be eliminated but the
savings would be small, since participation has been limited.

Another option that could save money is to reduce premium subsidies for revenue policies with
the Harvest Price Option, which allows farmers to protect against upward movements in prices.
President Obama’s fiscal 2017 budget proposed cutting the subsidy by 10 percentage points,
which was projected to save $16.9 billion over 10 years. USDA officials argued that the cut
would more closely track the value of the coverage.

The budget suggested saving another $1.1 billion over 10 years by restricting the purchase of
prevented planting coverage. The proposal called for ending the option to purchase 5 or 10
percent higher protection than provided under base prevented planting coverage.

Pros: Some economists and critics of the program say farmers would still participate in and
benefit from the program even if subsidies were reduced.

Cons: Farmers across the country consider crop insurance vital to their operations. If there’s one
thing farm groups would be sure to unite around, it’s fighting any cuts to the program. During
the last farm bill debate, they were joined by a wide variety of conservation and wildlife groups
who argued that maintaining the crop insurance program was also vital to maintaining
conservation on the ground. In part, that was because the 2014 farm bill relinked crop insurance
to conservation compliance.

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