The White House’s position on farm subsidies
has been a bit schizophrenic. Just a few months ago, President Donald Trump
endorsed and signed into law a $900 billion farm bill that dramatically expands
corporate welfare and waste in our farm-support system. Not only that, he has
showered farmers hurt by his ill-conceived trade war with additional subsidies
as a payoff.

But the president’s FY
2020 budget resolution
, unveiled earlier this week, sings a much different
tune. In contrast to the 2018 Farm Bill, which made no cost-saving reforms to
the crop insurance or commodity titles whatsoever, the president’s budget
request proposes several modest cuts that would better target funds toward
farms most in need of assistance.

First, it proposes reducing the average
premium subsidy for crop insurance from 62 percent to 48 percent across the
board. It also proposes enacting a means test that would limit crop insurance,
conservation and commodity subsidies to producers with an adjusted gross income
(AGI) of less than $500,000. The budget proposal also would enact modest and
much-needed reforms to the crop insurance delivery side of the equation, by
reducing insurance companies’ guaranteed rate of returns from around 14 percent
to 12 percent.

Finally, the budget tightens payment limits
for commodity farmers by limiting eligibility for subsidies to one manager per
farm. Together, the crop insurance and commodity reforms in Trump’s budget
request would save taxpayers $28 billion over 10 years.

House and Senate Agriculture Committee
leadership have been quick to blast the budget request as a betrayal of the
2018 farm bill and of rural America. However, it’s worth noting that these
ideas are not new. They are virtually identical to the proposals put forth in
President Trump’s last budget for FY 2019. President Barack Obama’s budget
requests also contained similar reforms to crop insurance.

These reforms continue appear year after year
in budget requests, regardless of which party is in the White House, because
they offer commonsense solutions to trim waste while still protecting the farm
safety net. Unfortunately, although many of these reforms were offered as
amendments during the farm bill debate, virtually all of them were blocked from floor consideration as a result
of closed-door negotiations.

In the end, America can feed the world, but
our farmers and ranchers need more access to foreign markets. Overly generous
domestic subsidies and payoffs to an agriculture industry harmed by misguided
trade policy inhibit our ability to expand foreign markets. Policymakers should
work to curb domestic subsidies and push aggressively for new opportunities for
trade liberalization. The president’s budget is a step in the right direction.

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