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Obama budget eats into crop insurance program
By STEVE BINDER
Illinois Correspondent

WASHINGTON, D.C. — President Barack Obama unveiled his proposed 2014 budget last week that not only takes aim at trimming costs associated with Social Security and Medicare, but also bites into the popular crop insurance program.

Overall, Obama said his $3.8 trillion budget is the start of a plan to cut the nation’s deficit by approximately $1.8 trillion over the next 10 years, and it includes elements of previous budget plans such as increasing taxes on wealthier Americans.

But it also includes changes to entitlement programs such as Social Security and Medicare – namely, the lowering of cost-of-living adjustments in future years. It was a proposal Obama said was a move toward “compromise” with House Republicans, saying he was ready to discuss moving on issues in the name of reaching a broader financial agreement.

Agriculture interests, meanwhile, are taking the biggest hit yet under recent attempts to fashion a new five-year farm bill. Under a Senate plan approved last year, a new bill would have trimmed about $25 billion in ag programs over 10 years. A House Agriculture Committee bill would have trimmed about $34 billion over 10 years.
Neither plan, however, looked at cutting back the nation’s crop insurance program. Obama’s budget blueprint does target crop insurance, to the tune of about $7.4 billion over 10 years.
Both versions of a farm bill in the Senate and House late last year included the elimination of the direct payment subsidy program for farmers, and lawmakers in largely agriculture states supported that cut. It remains in Obama’s budget plan, as does a shift in how food aid is delivered to international interests.

Under Obama’s plan, food aid no longer would be shipped directly. Cash instead would be transferred to the United States Agency for International Development to buy goods for delivery, saving an estimated $500 million over 10 years.

The moves were immediately criticized by several national grain and livestock groups, including the American Soybean Assoc. (ASA).
“As many farmers still struggle to recover from the worst drought in generations, now is not the time to make such a deep cut to the federal crop insurance program,” said ASA President Danny Murphy. “Farming is an industry grounded in uncertainty, whether with regard to markets, prices, drought or rainfall, and we assume a huge risk when we put seed in the ground each planting season.
“Crop insurance is a critical tool to ensure that not only are part of the risks covered for American farmers, but also for the millions of Americans who count on what we produce.”

The USDA’s own budget takes a 5.9 percent hit in Obama’s spending blueprint, down to $145.8 billion. Of that total, about $124.4 billion is considered mandatory spending for programs such as food stamps, crop insurance and other farm programs.
Obama said his budget plan would trim a total of about $37.8 billion over 10 years from farm subsidy programs overall, something he said the agriculture industry could sustain in part because overall farm income continues to climb.

The USDA itself forecasts net farm income this year to be up about 13.6 percent, to approximately $128.2 billion, the highest level in 40 years (adjusted for inflation).
4/17/2013