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Farm Bill (Budget Issues, CRP)
The Washington Insider section of DTN reported yesterday (link requires subscription) that, “House Agriculture Committee Chairman Collin Peterson, D-Minn., made a bold political move to use what observers suggest was bitter medicine for some of his constituents as a political bargaining point.”
“At issue is USDA’s Crop Insurance program. The agency uses private insurance companies and agents to offer the federal programs under a Standard Reinsurance Agreement.”
The DTN item explained that, “USDA began the renegotiation process late last year, and now has finally determined that payments for administrative and operating costs subsidized by the government would be capped at $1.3 billion next year, with the limit rising to $1.37 billion in 2015. Recently, USDA announced that all 16 companies signed the new SRA that will cut costs about $6 billion over 10 years.
“As the negotiation process wound down, its effect on the ‘agriculture baseline,’ became controversial, especially a decision by the Office of Management and Budget that $4 billion of the reduction would be used to reduce the deficit rather than support other agricultural programs as many agricultural supporters proposed.
“The remaining $2 billion in ‘baseline credit’ is to be allocated for several programs, including expansion of the pasture, rangeland, and forage program; providing a performance discount or refund to reduce the cost of crop insurance for certain producers; increasing conservation reserve program acreage; and, investing in new and amended conservation reserve enhancement program initiatives and CRP monitoring.”