Trump angers farmers with plans to cut crop insurance subsidies
US President Donald Trump's proposals to reduce government subsidies to farmers by $9bn and cap insurance support have been met with anger from farm states. The cuts would have a "disproportionate impact on small towns", said Michigan senator Debbie Stabenow. The agriculture sector makes up around 11% of the US workforce and is worth around $1tn. Trump's budget proposal also calls for the elimination of 5,263 jobs at the US Department of Agriculture.
Farm groups and some members of Congress from farm states are decrying proposed cuts to crop insurance and other safety net programs for farmers included in President Donald Trump’s budget.

The proposed cuts come even as farmers are facing their fourth straight year of falling income, and could particularly affect farm states such as Iowa, Kansas and Nebraska that helped Trump win the November election.

“Clearly, this budget fails agriculture and rural America,” American Farm Bureau Federation President Zippy Duvall said in a statement.

The proposed budget would cap the amount of money the U.S. government provides to help farmers pay insurance premiums and eliminate insurance coverage for lost revenue when crop prices and per-acre yields fall. That would reduce the federal insurance program’s budget by $28 billion over 10 years.

Trump has also proposed reducing subsidies to farmers, cutting those programs by $9 billion by decreasing the maximum income level from $900,000 to $500,000 for a farmer to be eligible. The budget would also cut 5,263 jobs at the U.S. Department of Agriculture, a 5.5 percent reduction in staff.

Farmers, economists and agriculture experts say it is important to support the agriculture sector, which makes up about 11 percent of U.S. employment, or about 21 million jobs, and contributes nearly $1 trillion to the nation’s domestic productivity.

“The strength of the agricultural economy has implications for rural America, but also for the larger U.S. economy,” Robert Johansson, the USDA’s chief economist, told senators last month.

Michigan Sen. Debbie Stabenow, the leading Democrat on the Senate Agriculture Committee, warned that the proposed cuts “would have a disproportionate impact on small towns across our country and leave those communities in crisis.”

But some people say there’s no need for farmers to worry just yet.

“What I’ve been telling farmers is let’s just relax a bit before we panic. It’s going to be hard for Trump to get anything done. That’s become really obvious,” said Brent Gloy, a former Purdue University agriculture economist who now works full-time on his family’s corn, soybean and wheat farm in southwest Nebraska, where Trump had strong support.

Indeed, Republican U.S. Sen. Charles Grassley, who owns a farm in Iowa and is a member of the agriculture and budget committees, doesn’t expect the crop insurance cuts to make it through Congress. Grassley considers Trump’s budget a non-starter, much like the budget proposals of Presidents George W. Bush and Barack Obama, who also suggested farm program cuts that never materialized.

“Most budgets are dead on arrival,” Grassley said during a recent conference call with reporters. “I don’t say that to be negative about any of the three presidents I’ve said it about.”

Farmer Harold Wolle, who lives in a Minnesota county where 55 percent of voters chose Trump, makes the same point and says it’s too early in the process for Trump supporters to be disappointed.

“We’re fortunate that Congress writes the budget, not the executive branch,” said Wolle, who is president of the Minnesota Corn Growers Association.

Subsidies for crops and crop insurance have sustained grain farmers in recent years as prices plummeted for wheat, corn and soybeans thanks to favorable weather that boosted harvests. The U.S. Department of Agriculture reported in February net farm income is expected to fall 8.7 percent this year to $62.3 billion, half of the $123.7 billion income posted in 2013.

The Trump administration says the proposed cuts help fulfill a campaign promise to balance the federal budget.

“I believe the people knew what they were doing when they elected President Trump president,” Agriculture Secretary Sonny Perdue said in conference call with Iowa reporters. “I see it as an opportunity to demonstrate to the American people we can do more with less and we will do more with less. We’re going to be winning in the end.”

Iowa farmer Chris Petersen, who voted for Hillary Clinton in November after supporting Bernie Sanders for the Democratic nomination, actually supports some cuts to farm subsidies, saying they promote the overproduction of certain crops.

“I believe in protecting agriculture and farms of all sizes up to a certain size. It’s a national food security issue,” said Petersen, who raises hogs, cattle and vegetables, which he sells to local residents and restaurants. “But it comes to a certain point where it’s just on steroids basically and there needs to be more management.”

At the same time, he says Trump supporters from depressed rural areas who thought they were electing someone who would help them should have known better.

“You get what you voted for,” he said. “People better be thinking about rural economies, the rural people, jobs, stability and changing things around so it works better for rural. A lot of people didn’t think this out too good.”

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Topics USA Agribusiness Iowa