ICYMI: How the budget deal harms farmers, costs jobs and kills crop insurance

October 28, 2015

The Hill
By Former Representative Larry Combest (R-Texas)

As Congress prepares to vote on a budget agreement that includes cuts to a key component of the farm safety net, Larry Combest, the former chairman of the House Committee on Agriculture and the Select Committee on Intelligence, makes clear to lawmakers what is at stake if it comes to pass.

He writes in an op-ed today:

    “The debt ceiling and budget agreement reached by the White House and congressional leadership will not be long-remembered for averting a U.S. default on its debts, or even for paving the way for completion of annual appropriations bills over the next two years.

    “Instead, its lasting legacy will be that it killed federal crop insurance.”

Recognizing that many people – even Members of Congress – may not be familiar with the intricacies of farm policy, Combest briefly highlights the history and evolution of federal crop insurance and how it became the successful public-private partnership it is today.

    “The government had delivered crop insurance and delivered it badly. Crop insurance was not available to many farmers and was financially out of reach for most farmers it was available to.

    “The game-changer occurred in 1980, when the federal government finally threw in the towel and turned delivery of crop insurance over to the private sector. Private-sector delivery — plus the introduction of revenue policies in the mid-1990s and passage of the 2000 crop insurance bill — caused crop insurance to become what it is today to both farmer and lender.”

    And, what it is today is a system where private companies sell and service 1.2 million insurance policies that protect 90 percent of American farmland. These policies are available on more than 120 crops and to farmers in all states regardless of their farm size or method of production. In fact, farmers spend billions a year out of their own pockets for coverage. The government discounts premiums and covers some losses, but the benefit to taxpayers is that they avoid paying for a huge, unbudgeted disaster assistance package when a catastrophic event happens. This is in addition to a secure and affordable national food supply.

But, as Combest writes, the success of this important risk management tool means nothing to farm policy opponents who have been working for years to gut the program. The 2014 Farm Bill with its $23 billion in savings demonstrates that farmers are more than willing to contribute to deficit reduction, but the cut in this budget deal is the deepest of all because it seems its intent is purely to harm American farmers.

    “[M]ake no mistake, to those who have pressed for more cuts to private sector delivery of crop insurance, year in and year out, the proposed cuts are not about the $3 billion in savings that could be found far less recklessly, but about killing federal crop insurance.

    “If the bill as written becomes law, opponents of federal crop insurance will have finally achieved their goal and at a time when net farm income is down 53 percent from just two years ago.

    “That will be the legacy of this bill.”

To read the full editorial click here.