Farmers ‘extremely nervous’ about Trump cuts

Source: Marc Heller, E&E News reporter • Posted: Thursday, February 15, 2018

President Trump’s proposed cuts to agriculture programs are scaring farmers — with the help of the news media, a former president of the Indiana Farm Bureau said yesterday.

“I deal with more questions about something that’s never going to happen than anything else,” said Don Villwock, retired president of the Indiana farm organization and owner of a corn and soybean farm in Edwardsport, Ind., at a Farm Foundation forum in Washington, D.C.

Villwock, who is also a former agriculture policy aide to retired Sen. Richard Lugar (R-Ind.), warned that the president’s proposals to slash crop insurance subsidies, among other cuts, have spooked bankers, who sometimes sell crop protection and whose lending decisions rest on assurances farmers will have positive cash flows.

The farm community is “extremely, extremely nervous” about cuts to crop insurance, especially given the Department of Agriculture’s prediction last week that farm incomes will fall 6.7 percent this year, Villwock said.

That would be the lowest farm income level, not adjusted for inflation, since 2006, the USDA’s Economic Research Service said.

And even when news reports note at the top that Trump’s budget has almost no prospect of becoming law, the mere mention of slashing farm programs sends fear through farm country, Villwock said.

The White House plan would cut the federal government’s subsidy for crop insurance from 62 percent to 48 percent, while limiting the benefit to farmers with adjusted gross incomes of $500,000 or less.

Underwriting gains would be capped at 12 percent, the Department of Agriculture said, which would “ensure that the companies receive a more reasonable rate of return given the risks associated with their participation in the crop insurance program.”

Overall, USDA would see a reduction of 16 percent, with cuts also envisioned for conservation programs, state and private forestry, and programs to combat forest pests and diseases.

That’s in line with the priorities of some conservative groups, which have called for less government spending on farm programs and more reliance on private industry.

“It certainly moves in the right direction,” said Daren Bakst, a research fellow in agricultural policy at the Heritage Foundation. While it’s important for farmers to have a safety net in case of crop failure, he said, “we insulate them from market forces, and we shouldn’t be doing that.”

The reaction to the budget request contrasts with the praise Trump has received in rural areas for paying attention to farmers’ concerns, including becoming the first president in years to accept the American Farm Bureau Federation’s invitation to speak at its annual convention in January (E&E Daily, Jan. 9).

Crop insurance is an issue for conservation advocates, as well, as farmers who receive subsidized insurance are required to craft and adhere to conservation plans.

Groups such as the National Sustainable Agriculture Coalition have called for a tighter relationship between the two, while saying the subsidies cost taxpayers too much, given their lack of transparency and unequal coverage among various crops.

In Congress, top lawmakers on the House and Senate Agriculture committees either criticized Trump’s proposal or dismissed it as irrelevant as they seek to preserve crop insurance and other programs in the 2018 farm bill.

In addition, the chairman of the Senate Agriculture, Rural Development, Food and Drug Administration and Related Agencies Appropriations Subcommittee, Sen. John Hoeven (R-N.D.), said in a statement, “Our producers continue to face challenges from low commodity prices and natural disasters — from devastating droughts to hurricanes — which is why we need to prioritize funding for USDA programs including crop insurance, the Conservation Reserve Program and rural development.”

Reaction from most farm groups has been negative, as well. Once an idea of cutting farm programs is suggested or enters the public realm, it can sow fear among farmers, said Coleman Garrison, director of government affairs at the National Association of Conservation Districts.

Conservation districts, created by states and funded from a variety of sources, work with farmers in local offices, often sharing services with USDA field staff — and gaining a sense of the mood in farm country, Garrison told E&E News.

The budget also doesn’t offer rural areas much promise of filling vacancies at the Natural Resources Conservation Service, an issue Trump inherited from the Obama administration. The budget request estimated NRCS field staff at 9,594 in fiscal 2019, down from 11,497 in 2017 and an estimated 10,403 this year.