Chicago | Reuters — U.S. farm groups on Tuesday pushed back against President Donald Trump’s proposal to slash agriculture spending, viewing it as a fresh threat to a struggling farm economy.
The White House on Monday proposed $46.54 billion in cuts to federal government funding for the agriculture sector over the next 10 years, including limits on federal subsidies for crop insurance premiums (all figures US$). Congress has the final say on the government’s budget and lawmakers said the president’s plan stands little chance of passing.
U.S. Agriculture Secretary Sonny Perdue said there was no “sugarcoating” the budget proposal, which could lead to the elimination of 5,263 jobs at the department if implemented, or about five per cent of its workforce.
USDA requested $18 billion for department spending in fiscal 2018, down from $24 billion in 2017.
Farmers in the U.S. agricultural heartland overwhelmingly supported Trump last November and are struggling with low crop prices that are hurting incomes.
“This budget seems to really go after the people that got the president elected,” said Zack Clark, director of government relations for the National Farmers Union.
Some of the biggest proposed cuts come from changes to the crop insurance system, which many farmers rely on to keep their operations running.
“It’s clear that this budget was written without input from farmers who would be severely affected,” Ron Moore, president of the American Soybean Association, said in a statement.
But changes in crop insurance that cause farmers to cut back on plantings could provide relief to a global balance sheet heavy with supplies. Falling production could pay off in the long run by helping to lift prices, said Scott Irwin, agricultural economist for the University of Illinois.
Trump’s budget imposes a $40,000 limit on crop insurance premium subsidies, which could prevent some farmers from insuring their entire acreage. There is currently no limit.
Typically, farmers pay a portion of their insurance premiums and USDA covers the rest, said Jeff Harrison, a lawyer who represents the Crop Insurance Professionals Association.
“In practical terms, you’re really going after full-time farm families.”
U.S. Senator Debbie Stabenow, the ranking Democrat on the Senate agriculture committee, said she would oppose the cuts, which “would leave our farmers, families, and rural communities vulnerable in tough times.”
House agriculture committee chairman K. Michael Conaway and Senate agriculture committee chairman Pat Roberts, both Republicans, said they “will fight to ensure farmers have a strong safety net.”
— Reporting for Reuters by Mark Weinraub and Tom Polansek in Chicago.