Iowa farmers could lose hundreds of millions of dollars in federal subsidies under the latest plan President Obama unveiled Monday to cut government spending. The plan would also raise crop insurance premiums.
Iowa Senator Chuck Grassley hesitates to endorse the president’s proposal, but Grassley does say agriculture can no longer be a “sacred cow” and farmers will need to share in the efforts to cut the country’s massive debt.
“Agriculture, like every other program, has to contribute something to the efforts to reduce the deficit and when we’re done doing that, we want to make sure that we still have a safety net,” Grassley says. “The best way to do that is that we ought to have a strong crop insurance program.”
The Obama plan calls for ending direct payments to cotton and grain farmers to save $30-billion over a decade. Iowa farmers got $473-million in direct payments last year. Under the president’s plan, crop insurance premiums would be cut by more than eight-billion dollars over ten years.
Crop insurance subsidies to Iowa farmers last year totaled $341-million. Grassley, a Republican, says he would rather not look to the crop insurance program as a place to make deeper cuts.
“I also would remind the president, the renegotiation of crop insurance relationships between the federal government and the companies was renegotiated a little over a year ago, saving $6 billion,” he says. Grassley, who maintains a farm in northeast Iowa near New Hartford, says that safety net of crop insurance is important.
Grassley says, “I’m a little less interested in taking money from crop insurance than I am other places, but the bottom line of it is, agriculture can’t be a sacred cow and not contribute something to deficit reduction, but I want it to be proportional.” The so-called Congressional Supercommittee is tasked with cutting the federal deficit this fall by more than a trillion dollars over ten years.