The President increases the focus on reforming agricultural business safety net programs governed by the Farm Bill.

The 2019 President’s Budget Request identifies $47 billion in savings from reforming agricultural programs governed by the Farm Bill. This is a nearly 24 percent increase from the $38 billion in savings identified in the 2018 budget request.

Much of the change is due to increased cost savings estimates from fully eliminating the Conservation Stewardship Program, as opposed to limiting new enrollment, but also an expansion to reforms of income subsidy programs beyond federally subsidized crop insurance. Unlike last year’s request, this budget seeks reforms to business income subsidy programs authorized in the “Commodity” title of the farm bill. This includes eliminating funding for a supplemental disaster program, the Livestock Forage Program, and calls for common sense reforms to close commodity program loopholes that allow extra payments to peanut producers and numerous “managers” who often never step foot on the farm.

While this budget request does not go far enough in reforming the duplication between federally subsidized crop insurance and commodity programs, it’s a move in the right direction.

Proposed Reforms to Farm Bill Agricultural Programs Savings in FY2018 Request Savings in FY2019 Request
Limit crop insurance premium subsidy to $40,000 $16.2 billion
Eliminate the Harvest Price Option $11.9 billion
Reduce crop insurance premium subsidies to an average 48 percent per-policy (currently government subsidies average 62 percent per-policy) Not Included $22.371 billion
Limit subsidy eligibility to $500,000 AGI $1.1 billion $1.125 billion (Commodity) $0.724 billion (Crop Insurance)
Streamline Conservation Programs – Regional Conservation Partnership Program and Conservation Stewardship Program $5.755 billion $13.042 billion
Eliminate Small Programs $3.1 billion $.958 billion
Reduce taxpayer subsidy for private crop infsurance company rate of return from 14% to industry average of 12% Not Included $2.988 billion
Eliminate farm payment loopholes — including the separate payment limit for peanuts and payments to more than one manager per farm Not Included $1.348 billion
Eliminate Livestock Forage Program Not Included $4.483 billion
Total Proposed 10-Year Savings $38.046 billion $47.039 billion
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GO TO THE FY19 BUDGET LANDING PAGE.

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