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Trump Budget Seeks Subsidy Cuts to Farmers

The executive branch released its Federal budget proposal this week.  Like previous Trump administration budget outlines in 2017, and last year, Monday’s framework sought cuts to U.S. Department of Agriculture programs.  Today’s update highlights recent news reports that discuss some of the specific items contained in the President’s Fiscal Year 2020 budget request.

Wall Street Journal writer Jesse Newman reported on Monday that, “A Trump administration proposal to cut Agriculture Department funding by 15% drew consternation from growers and ranchers who are struggling through a multiyear slump in the U.S. farm economy.

The White House on Monday proposed a budget for fiscal 2020 that included $20.8 billion in funding for the USDA, down $3.6 billion from the agency’s estimate for 2019.

The cuts would come from farm safety net programs including commodity subsidies and federal nutrition programs. The administration called some farm subsidy programs overly generous and proposed limiting eligibility to farmers with adjusted gross incomes of at most $500,000, a decline from current levels.

“‘There is a very clear disconnect between President Trump’s priorities and the economic realities facing family farmers, ranchers, and rural communities,’ said Roger Johnson, president of the National Farmers Union, a trade group.”

Ms. Newman explained that, “The proposals were quickly dismissed by some farm-state lawmakers in Congress. The president’s proposed budget is seen more as a list of priorities than draft legislation. Congress writes the spending bills, which may not reflect White House proposals.”

“Rep. Collin Peterson (D, Minn.), chair of the House agriculture committee, blasted the proposed cuts, saying they would go nowhere in Congress,” the article said.

The Journal article pointed out that, “Agriculture Secretary Sonny Perdue defended the president’s budget, saying the USDA would do its part to reduce federal spending while maintaining a safety net for farmers, hungry families and others.”

Bloomberg News writers Mario Parker and Alexandra Semenova reported Monday that, “President Donald Trump’s ‘I LOVE YOU!’ tweet to farmers is facing another challenge: Budget cuts that will slash subsidies for crop insurance and small growers.”

“The plan would trim the USDA budget by $3.6 billion to $20.8 billion, lowering subsidies for crop insurance premiums to 48 percent from 62 percent, and limiting subsidies for growers who make less than $500,000 annually,” the Bloomberg article said.

“Trump to Farmers: ‘LOVE YOU!’ But I Still Want to Cut Your Subsidies,” by Mario Parker and Alexandra Semenova. Bloomberg News (March 11, 2019).

Parker and Semenova reminded readers that, “Farmers comprise the bedrock of the rural base of voters that sent Trump to the White House. That constituency found itself caught in the cross-hairs of Trump’s trade war with Beijing after China slapped retaliatory tariffs on U.S.-grown crops, including soybeans.

The Trump administration responded with a plan to authorize as much as $12 billion in aid, but even prior to the ruckus between the world’s two largest economies, American farmers were dealing with low prices and a decline in incomes wrought by bumper crops.

Reuters writer Humeyra Pamuk reported Monday that, “Democratic Senator Debbie Stabenow said the budget cut would jeopardize the USDA’s ability to implement the farm bill at a time when farmers are struggling with economic instability and trade uncertainty.”

The Reuters article added that, “‘In the midst of a prolonged rural recession and crop damage from devastating weather events, we should be having a conversation about how to strengthen and improve crop insurance, not weaken the policies that so many of America’s farmers rely on,’ a coalition of seven crop insurance groups said.”

And DTN Ag Policy Editor Chris Clayton reported Monday that, “In another proposal, the White House proposes capping crop insurance underwriting gains, a plan that would save taxpayers $2.948 billion over the next decade as well.”

Mr. Clayton added that, “For people on food aid, the budget plan reiterates the ‘America’s Harvest Box‘ proposal to send 100% American grown foods directly to households for people on the Supplemental Nutrition Assistance Program. That idea was criticized last year when the White House proposed it. The budget also continues USDA’s plan to reduce SNAP beneficiaries by thinning out people considered able-bodied adults without dependents.”

Keith Good Photo

Keith Good is the Farm Policy News editor for the farmdoc project. He has previously worked for the USDA’s National Agricultural Statistics Service, and compiled the daily News Summary from 2003-2015. He is a graduate of Purdue University (M.S.- Agricultural Economics), and Southern Illinois University School of Law.

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