President Obama’s 2015 fiscal year federal budget proposes cutting payments to crop insurance companies. According to DTN, the proposal would cut the rate of return to insurance companies from 14 percent to 12 percent and cap administrative costs and operating reimbursements, and, “it would cut premium subsidies on some crop insurance policies by three-percent and cut other policies by an additional four-percent.”
The recently passed Farm Bill that was signed by President Obama, however, maintains and expands crop insurance and restricts the USDA’s ability to negotiate crop insurance budget cuts.
The President’s plan also allocates $300 million to initiate construction of the National Bio and Agro-Defense Facility in Manhattan, Kansas to replace the Plum Island facility.
The President’s budget is just a proposal, members of the House and Senate will question White House officials on the plan and then draft their own budgets. In a best-case scenario, those two plans then go to a conference committee for a final resolution which would then pass both houses of Congress by April 15th. In reality, the process has rarely worked that way and Congress has failed to pass a budget opting instead to fund the government through continuing resolutions.
~Brownfield’s Bob Meyer contributed to this story~