March 18, 2024

Farmers could be adversely affected by federal budget cuts

Schnell among those concerned about Farm Bill crop insurance

Some cuts in the most recent federal budget cycle, and the impact on crop insurance, have brought a negative reaction from one industry advocate, and even frustrated the lawmakers who voted to approve the overall budget.

Known as the Bipartisan Budget Act of 2015, the budget that was passed partly to avoid a repeat of the government shutdown chaos and politicking in recent years ended up installing significant caps to crop insurance. Rolland Schnell, whose farm is located southeast of Newton, is the president-elect of the Iowa Soybean Association’s Board of Directors.

“What is frustrating about the cuts is that there is too much of a short-term view approach to this,” Schnell said. “Things were relatively good (in terms of commodity prices) in 2013, when the last Farm Bill was being worked on. There was about three years of work put into that bill — with many concessions made — but a very workable safety net was retained.”

The ammended final version of the 2014 U.S. Farm Bill was approved with a 58 percent majority in the House, and 68 U.S. Senators approved it, with five of Iowa’s six Congressman voting in favor of it. Sen. Chuck Grassley was the only Iowa lawmaker to vote against the final version of the bill.

Grassley said at the time that one of the few positive sides of the 2014 Farm Bill was that a strong crop insurance program was left intact. After the recent budget negotiations hit the crop insurance program with cuts, the Republican said he voted in favor of the overall budget largely to avoid a government shutdown, but he was not pleased with either the closed-door process or many provisions of the spending plan.

“Government shutdowns don’t save money. They cost money, and they’re best avoided,” Grassley said. “This also was a bad deal on process. The 144-page bill was put together behind closed doors, and members had just a couple days before voting on it. This didn’t give the Senate much of a chance as the deliberative body it’s supposed to be. It increases spending by $112 billion over the next two years, and pays for it with bad policy — such as a $3 billion cut to crop insurance.”

U.S. Rep. Dave Loebsack voted in favor of the budget act and its final amendment, but acknowledged he did so with regret about farm provisions. He, too, took exception to portions of the final bill that were written without open-floor debate and without public scrutiny.

“This bipartisan, commonsense, compromise budget plan is a good start and is needed to get past the political games,” Loebsack said. “The budget plan that was voted on was far from perfect and I was reluctant to support it. Not only was this bill written behind closed doors, but it attempted to balance the budget on the backs of America’s farmers and ranchers.”

Schnell said federally subsidized insurance isn’t simply funds available if a farmer’s crop fails, although that’s an important component. The insurance caps and benefit provisions also affect a great deal of a farmer’s planning elements.

“The amount of crop insurance has a ripple effect on many parts of the business,” Schnell said. “It affects land prices, food prices and many things in between. It’s the only real safety net the ag industry has, and without it, it destroys stability.”