Planting (Fake) Savings in the Farm Bill

Rolling Analysis, FY21 Budget Planting (Fake) Savings in the Farm Bill

Agriculture,  | Analysis
Feb 10, 2020  | 3 min read | Print Article

The President’s Budget Request for FY21 identifies $57.7 billion in savings from reforming mandatory agricultural programs at the U.S. Department of Agriculture (USDA).

The bulk of this savings, $43.2 billion, comes from reforming agricultural programs that subsidize incomes of agricultural businesses. This is a 6.7 percent decrease from the $46.1 billion in savings identified in the 2020 budget request. An additional $14.5 billion in USDA-related savings is derived from imposition of food inspection user fees and modifications to various child nutrition and commodity purchase programs.

It should be noted the president has proposed massive savings in the agricultural safety net through each of his four budget requests. Yet when given the opportunity to advocate for change, President Trump has instead ghosted reformers, increasing the role of the federal government in the farm sector’s balance sheet. He signed the income entitlement expanding 2018 Farm Bill despite many of his common sense proposals being stifled from debate by the House Rules Committee and Senate Leadership. And there is his trade war that not only undermines any notion of stability and predictability in farm country, but has resulted in a promised $28 billion in unbudgeted bailout spending.

Taxpayers will likely have to wait for release of USDA’s detailed budget justification for further details regarding eliminating lower priority Farm Bill programs, eliminating redundant farm bill programs, and rescinding ability to collect duplicative assistance.

Proposed Reforms to Farm Bill Agriculture Programs Savings in FY2019 Budget Request Savings in FY2020 Budget Request Savings in FY2021 Budget Request
Limit subsidy eligibility to $500,000 Adjusted Gross Income (AGI) $1.125 billion for commodities, $.724 billion for crop insurance $1.306 billion for commodities, $.641 billion for crop insurance $1.306 billion for commodities, $.650 billion for crop insurance
Streamline conservation programs $13.042 billion (Regional Conservation Partnership Program and Conservation Stewardship Program $8.872 billion $9.145 billion
Eliminate lower priority Farm Bill
programs
$.958 billion $.936 billion $1.017 billion
Tighten commodity payment limits and close loopholes $1.348 billion $1.348 billion $1.348 billion
Eliminate Livestock Forage program $4.483 billion $7.819 billion $5.040 billion
Eliminate the crop insurance 508(h) program Not included $.120 billion $.120 billion
Reduce crop insurance premium subsidies to an average 48 percent per-policy (currently government subsidies average 62 percent per-policy) $22.371 billion $22.116 billion $21.397 billion
Reduce taxpayer subsidy for private crop insurance company rate of return from 14% to industry average of 12% $2.988 billion $2.948 billion $2.818 billion
Rescinding Ability to Collect Duplicative Assistance $.360 billion
Total Proposed 10-Year Savings $47.039 billion $46.106 billion $43.201 billion

 

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