As the Trump administration unveils its spending plan, an agenda to bar crop insurance subsidies and cap the amount of premium aid to $40,000 per farmer has caused an uproar amongst U.S. farmers and crop insurers who fear ensuing losses to their respective industries.
Part of the proposed budget includes plans to remove USDA’s rural economic development programme and cut down on conservation programmes to save up to $46.5 billion on agricultural support initiatives, The White House announced.
However, some of these savings are also expected to come from imposing user fees for USDA inspection and regulatory programmes, a move that would pass further costs on to farmers.
Roger Johnson, president of the National Farmers Union, said; “The president’s proposed budget is an assault on the programs and personnel that provide vital services, research, and a safety net to America’s family farmers, rural residents and consumers,” Successful Farming reported.
Crop insurance currently accounts for $8 billion a year of USDA’s farm support programmes, and the U.S. president’s proposals make up a total 36% cut in the federally subsidised crop insurance program over the coming decade.
The total sum of crop insurance cuts is expected to come to $16.2 billion – if government’s share of crop insurance premiums are limited – and an added $11.9 billion if the harvest price option is eliminated.
Should the proposals receive approval, the crop re/insurance and farming industry could see considerable upheaval in the coming decade.
And although some industry losses could ensue, the move could also create renewed demand for re/insurance and lead to greater innovation within agriculture re/insurance solutions as more entities compete to offer efficient and affordable solutions to protect the vital farming industry from supply chain losses.