Congress reaches agreement to avoid crop insurance cuts

The House and Senate reached a budget agreement today, potentially avoiding more than $3 billion in cuts to the crop insurance program.

The bill’s inclusion of the proposal was argued over for three days before the agreement was reached; the cuts would have reduced the rate of return for crop insurance companies from 14 to 8.9 percent.

House and Senate Agriculture Committee leaders met with Congressional leaders because the cut remains in the budget version passed by the House and currently before the Senate. The two sides secured an agreement to eliminate the cuts as part of a spending bill.

American Soybean Association (ASA) officials said they were happy to see an agreement to remove the cuts, but language in the bill that causes the ASA to remain in a "trust-but-verify mode" exists on the issue. The agriculture industry is also facing sequestration in fiscal year 2016, including payments through the Agricultural Risk Coverage and Price Loss Coverage. Other industries are not exempt from the 6.8 percent cut in the bill.

The 14 percent to 8.9 percent cut would have a significant impact on farmers. The crop insurance industry is already facing consolidation and the cuts would expedite the process, leading to fewer choices for farmers.

Organizations in this story

American Soybean Association 12125 Woodcrest Executive Dr St Louis, MO - 63141

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