Trump budget proposes subsidy cuts to farmers as they grapple with crisis
Farmer standing in field (Shutterstock)

President Donald Trump’s 2020 budget on Monday proposed a 15 percent cut for the U.S. Department of Agriculture, calling its subsidies to farmers “overly generous” at a time when they are going through the worst crisis in decades due to depressed commodity prices and Trump’s trade tariffs.

The Republican president’s budget requested $20.8 billion for the USDA, a cut of $3.6 billion, or 15 percent, from the 2019 estimate, according to the proposed budget text. It proposes reducing premium subsidies for crop insurance, limiting the number of producers who would be eligible and tightening commodity payment limits.

“The budget also proposes that USDA responsibly and efficiently use taxpayer resources by making targeted reforms to duplicative programs and overly generous subsidy programs,” the document said.

The U.S. agriculture industry is going through its worst crisis since the 1980s, triggered by depressed prices and deepened by Trump’s trade dispute with key trading partners such as China.

The American rural heartland had helped carry Trump to victory in 2016 and remains largely supportive of his hard line on trade, but is urgently calling for a deal with China to end the trade dispute.

“The steep cuts to the USDA would jeopardize the department’s ability to implement the farm bill at a time when farmers are struggling with economic instability and trade uncertainty,” Democratic Senator Debbie Stabenow said in a statement.

The farm bill, crop insurance and commodity programs serve as a safety net for farmers, shielding them from the financial damage of unforeseen natural disasters and helping them manage their risk. A new farm bill was passed at the end of 2018.

The budget proposes to reduce the average premium subsidy for crop insurance from 62 percent to 48 percent and limit subsidies to producers that posted an adjusted gross income of half-a-million dollars or less.

It also requests tightening commodity payment limits, including eliminating an “unnecessary and separate” payment limit for peanut producers and limiting eligibility for commodity subsidies to one manager per farm.

The budget also proposes tightening around the Supplemental Nutrition Assistance Program (SNAP), which feeds roughly 40 million Americans and is administered by the Agriculture Department. The budget text said it includes proposals to help able-bodied adults to enter the job market.

Food stamps were at the heart of a bitter partisan debate last year. The administration unveiled plans to curb them through a proposed rule after Republican efforts to do so failed in the Congress.

Secretary of Agriculture Sonny Perdue described Trump’s budget as “fiscally conservative” and said the department will do its part in reducing federal spending. He also vowed it will continue to provide a safety net for farmers.

Trump’s budget is expected to be rejected by Congress, where Democratic leaders on Sunday warned him against what they called a “repeat performance” of last year’s funding war, which led to a five-week partial shutdown of the federal government.

Reporting by Humeyra Pamuk; Editing by Bill Trott