The White House and Congressional leaders recently struck a tentative budget deal that provides a framework and additional funding needed to allow Congress to complete the annual appropriations funding legislative process.

According to Traci Bruckner, Senior Policy Associate at the Center for Rural Affairs, the budget deal contains significant implications for agricultural and Farm Bill programs. “This bill takes a small step in reforming federally subsidized crop insurance programs by reducing the cap on the profits that crop insurance companies extract from administering the program from 14.5 percent to 8.9 percent,” said Bruckner. “In addition, it also indicates that the Standard Reinsurance Agreement must be renegotiated by December 31, 2016 and once every five years thereafter.”

“This is a small but a positive step forward,” noted Bruckner. “Insurance companies have been one of the largest beneficiaries of the subsidized crop insurance program. They witnessed double digit returns over the last decade or more, with one year being as high as 34%. During belt-tightening times, it is most appropriate to ask crop insurance companies to accept a reduction in the profits from federal subsidies that they receive.”

“Moreover, the budget deal scraps the Farm Bill provision that prevented taxpayers from benefiting from government negotiations with the private sector over the delivery of crop insurance,” added Bruckner. “This was an outrageous gift to the crop insurance lobby and it is a policy that should never have seen the light of day.”

Bruckner noted further that while there is a great deal more crop insurance subsidy reform needed to support and protect family farmers and the environment, renegotiation is a small but important first step toward much needed comprehensive reform.

“And with the additional funding the budget deal provides to the appropriators to finish the fiscal year 2016 funding bills, Congress has the opportunity to turn back the tide on cuts to conservation,” Bruckner continued. “Congress should move quickly to eliminate the 23 percent cut to the Conservation Stewardship Program in the pending House bill and the $300 million cut to the Environmental Quality Incentives Program that is currently included in both the House and Senate bills.”

“Opponents of cuts to crop insurance company profits have criticized ‘opening up the Farm Bill’ but those criticisms ring hollow when compared to how often Congress has opened up the Farm Bill to cut conservation programs,” concluded Bruckner. “It is disingenuous to use rhetoric about family farmers to protect crop insurance company profits while at the same time cutting the conservation programs that farmers and ranchers depend upon to improve soil and water quality, conserve water, and prepare for extreme weather events.”


Established in 1973, the Center for Rural Affairs is a private, non-profit organization working to strengthen small businesses, family farms and ranches, and rural communities through action oriented programs addressing social, economic, and environmental issues.

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