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White House budget would cut USDA funds 15 percent


WASHINGTON. D.C. — The proposed White House budget would make cuts to crop insurance, the USDA, Medicare, Medicaid, the Army Corp of Engineers, and almost all other government programs in the country.

The budget released by President Donald Trump would increase military spending by 5 percent, and budget about $8.6 billion for construction of a wall at the U.S.-Mexico border. It also proposes a 15 percent cut to USDA funding.

The proposed budget is unlikely to pass and Democratic members of the House and Senate have said it is dead on arrival. Trump's proposed budgets in the past two years were largely ignored even when both houses of Congress were held by the Republicans.

"I'm just concerned," said Davie Stephens, president of the American Soybean Assoc. and a farmer in Kentucky. "Crop insurance cuts really stand out to me … and we're also looking at the proposal that has reductions to the Army Corp of Engineers.”

He said the nation’s waterways give the United States an advantage over other exporting countries, such as Brazil. They make it easier to move products on a global scale.

He doesn't think the budget will be approved by Congress, but he is concerned about the administration proposing the cuts. The 2018 farm bill was signed by Trump on Dec. 20, but a few months later, he is proposing cuts to programs in that bill. The bill had Congressional, industry, and farmer support, and to see Trump change his position to such an extent in such a short period of time causes Stephens to wonder what's changed.

If the crop insurance changes go into effect, the government would pay out $20 billion less over a 10-year period, he said. The farm economy has been down for the last six years, and farmers expected some relief as the farm bill was implemented. These proposed cuts add to farmers’ stress, he said.

Matt Perdue, government relations director for the National Farmers Union, doesn't think the administration is seeing the possible damage to middle America. "There are a lot of ways this bill will disadvantage farmers," he said. "Repealing Medicaid expansion is a non-starter for us."

The proposed budget would reduce Medicaid by about $1.5 trillion over 10 years. Expanding Medicaid increased the people covered by insurance by about 6 percent, Perdue said.

According to the AARP, the cuts would eliminate the extra Medicaid funding for states that expanded their government programs under the 2010 Affordable Care Act. About 15 million more Americans have joined Medicaid since.

The proposed budget would also give states more power to design their Medicaid programs, including allowing them to institute a per-person cap for recipients.

Perdue said the proposed budget would also gut the Rural Economic Development Loan and Grant Program, which gives grants to local utility companies that can then loan the money to rural businesses and communities to help expansions.

"I think we came through with a relatively strong farm bill," he said. "Everyone is concerned … We're worried about how this budget reflects the administration’s response to challenges in rural America."

This proposal is the beginning of the budget appropriation cycle. Members of Congress will make final budget decisions. Perdue believes farmers should contact their representatives to let them know how important the programs are to the farming operations, and "really encourage them to reject the administration's proposal."

Jonathan Coppess, with the Agricultural and Consumer Economics Department at the University of Illinois, said most of the proposed cuts would require Congressional movement to be implemented. Nothing will happen in the short term, but that can cause people to be lulled into a false confidence.

But, the budget indicates the policies of the administration. Coppess wonders what the long-term impact will be, even if these cuts aren't made. He worries cuts will be made to research departments that stifle the innovation farmers have been using for the last few decades to meet production needs.

"We need innovation and crop insurance. Those things have value," he said. "There's something disingenuous about it … They create a program to (offset) the tariffs, they pass the farm bill, and then they come out with this."

He thinks farmers should be more concerned about the politics being played with the SNAP program, which provides food-buying assistance to the poor. "We have a lot of rural communities that are struggling, the opioid issues and things like that," he added. "It just strikes you as dismissive of what's happening in rural communities, farm communities, and the world at large."

Last week, ABC News reported the administration is reviving the idea of a “Harvest Box” for SNAP recipients. Last year, it proposed food kits to be delivered to recipients’ homes including food like “shelf-stable” milk, cereal, pasta, peanut butter, canned meat, and canned fruits and vegetables. They would pay for boxes with their monthly benefits and get the remaining value on a debit card.

Critics of the idea in 2018 said it would reduce families’ available money to buy fresh fruit, vegetables, and cold milk and impose food choices. They also questioned how the boxes would be distributed to millions of SNAP recipients who live all over the country.

Coppess also said the farm economy sends ripples into the national economy; cuts to programs that impact farmers will impact others, too. Cuts would impact hospitals’ abilities to provide services in rural areas, said Brent Gloy, an agricultural economist with Agriculture Economic Insights and a farmer in Nebraska.

"They're already closing nursing homes left and right because of Medicaid reimbursement rates," he said, adding anything that impacts health care in rural America makes it less possible to provide services and more difficult for people in those communities to get care.

He said crop insurance cuts have been proposed for years and never get passed. He's not worried about it now.

"The farm economy right now is in terrible shape … The possibility of getting anything meaningful from the farm bill seems slim," Gloy said. "This is just more bad news … If those cuts went through, it would increase the cost of farming."

He said farmers have been collateral damage in the trade dispute and everyone is hopeful it will be resolved, soon – but until then, it's one more thing they have to worry about.