The Obama administration’s final budget proposal for USDA calls for an increased presence in Cuba to increase exports, a reduction in the crop insurance premium subsidy and an increase in conservation funding.
On Cuban trade, the goal is to alert Congress to the expanded trade opportunity available in the island nation, said Agriculture Secretary Tom Vilsack in a Feb. 9 conference call. Cuba imports 80% of their food.
“We believe that having people in Cuba would help facilitate opportunities now and in the future,” he said. “I don’t think that we currently have the authority, absent some direction from Congress to be able to use existing resources within the USDA budget to fund personnel.”
The proposal includes two proposals to reform crop insurance. The first reduces subsidies for revenue insurance policies that insure the price at the time of harvest. The second reforms prevented planting coverage and removes the optional buy-up coverage.
The changes are being proposed because USDA has been criticized by the Inspector General and the General Accounting Office for management of the crop insurance program, specifically as it relates to prevented planting, Vilsack said.
“We also believe, given the circumstances, that this is a partnership, a balanced partnership, between taxpayers, farmers and insurance companies and the reality is that in some of our . . . in the price harvest loss program, we are funding, or subsidizing 62% or so of the premium, that is taxpayers are. We think it makes more sense in a partnership to be closer to 50/50 so that’s the reason.
“And, you know, the fact is, if you surveyed the United States, if you surveyed the population of the United States, and you posed the question to them about this, I would be surprised if there wasn’t support for the administration’s position,” Vilsack said.
The federal crop insurance program costs the government about $9 billion a year, on average, including $3 billion for private insurance companies to administer and underwrite the program and $6 billion in premium subsidies to farmers.
The reforms are expected to save $18 billion over 10 years.
The administration’s budget proposal increases conservation spending by about $11 million and funds the Environmental Quality Incentives Program at the authorized funding level.