NAWG, NCGA oppose deal to cut crop insurance

by World Grain Staff
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WASHINGTON, D.C., U.S. — The U.S. administration and congressional leadership announced on Oct. 26 a bipartisan budget deal that would both raise discretionary spending caps for FY 2016 and FY 2017 and it would increase the debt limit until March 15, 2017. This budget agreement could have significant negative impacts on agriculture, the National Association of Wheat Growers (NAWG) said.

“NAWG is very opposed to these provisions that would be devastating to the crop insurance companies and ultimately for growers as well,” said Brett Blakenship, NAWG president and wheat grower from Washtucna, Washington, U.S. “In this difficult economic climate, at a time when commodity prices are low, agriculture has already taken a hit. We took unprecedented cuts in negotiating the farm bill. Just one year into the new farm bill and Congress let sequester cuts happen. Now they want to cut more. We cannot stand by and allow more cuts to be made.”

The text of the agreement includes a provision, Title II, that would require the U.S. Department of Agriculture to renegotiate the Standard Reinsurance Agreement, the agreement between the Risk Management Agency and the crop insurance companies to administer the federal crop insurance program, by Dec. 31, 2016, and that the agreement establish a target rate of return for the approved insurance providers of 8.9% of retained premium for each of the 2017 through 2026 reinsurance years, resulting in $3 billion in cuts.

“Slashing the federal crop insurance program is bad policy,” said Chip Bowling, National Corn Growers Association president and corn farmer from Newburg, Maryland, U.S.  “The 2014 farm bill provides farmers with a critical safety net, the cornerstone of which is the federal crop insurance program. Cuts to the crop insurance program will lead to fewer insurance providers and agents, and that means fewer choices for farmers to manage their risk.”
 
“This deal is yet another attempt to reopen the farm bill, despite major reforms and $23 billion in budget savings,” he said.  “Agriculture remains the only industry that has voluntarily accepted spending reductions. We stand with Chairmen Roberts and Conaway and Ranking Members Stabenow and Peterson in defending the farm bill and calling on Congress to remove these cuts.”

Click here to read the agreement.

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