March 20, 2012 / 3:17 PM / 6 years ago

House plan would slash US crop, insurance subsidies

* Plan seeks larger cuts than farm panel suggested

* Obama also targeted direct payment, crop insurance

* Plan could force bigger cuts in new farm bill

* Plan also criticizes Dodd-Frank financial reforms

WASHINGTON, March 20 (Reuters) - U.S. farm and crop insurance subsidies would be cut by $30 billion over 10 years under a proposal made by the House of Representatives Budget Committee chairman on Tu esday, far larger reductions than agricultural-state lawmakers suggested.

Budget chairman Paul Ryan called for reductions in the $5-billion-a-year “direct payment” subsidy and reforms to control the soaring cost of federally subsidized crop insurance, the largest part of the farm safety net.

“These reforms will save taxpayers roughly $30 billion over the next decade,” Ryan wrote in a budget blueprint for the federal government. The cuts equal 19 percent of projected spending in the two areas through fiscal 2022.

If the House agrees with Ryan, the Agriculture Committee will be required to write a farm bill that meets the goal of $30 billion in cuts. Earlier this month, its leaders said $23 billion would be appropriate. The Senate Agriculture Committee is expected to use $23 billion as its target.

Ryan’s plan would reduce “the fixed payments that go to farmers irrespective of price levels” and “reform the open-ended nature of the government’s support for crop insurance so that agricultural producers assume the same kind of responsibility for managing risk that other businesses do”.

At present, the government pays 60 percent of the premium for crop insurance as well as underwriting farm insurers’ operating costs and sharing the burden of payments to farmers in high-loss years.

President Barack Obama proposed $32 billion in farm subsidies in his budget proposal o n Feb. 13. He would end the direct payment, idle less land, reduce crop-insurance subsidies, and revive a standby disaster-relief program.

Ryan also criticized the Dodd-Frank financial reform law as “government over-reach in the private sector”. The law brings over-the-counter trading in derivatives under federal regulation and has brought complaints of a welter of costly and complicated rules for futures and derivatives markets.

Much of Ryan’s criticism is aimed at the law’s impact on Wall Street. However, he called for a thorough review of financial regulations and for “repealing recent expansions of the federal role in financial services”.

Also in the Ryan plan is a proposal to convert the food stamp program, which helps poor people buy food, into a block grant to states with a limit on spending. Access would be tied to work or job training. Food stamps account for three-quarters of farm-bill spending.

Reporting by Charles Abbott; Editing by Dale Hudson

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below