American soybean lobby urges rethink on Trump budget

The American Soybean Association has urged President Trump to scrap plans to limit farm subsidies, calling his budget proposal a "non-starter" and one that would do significant harm to the nation’s soybean farmers.

In a statement released Tuesday, ASA President John Heisdorffer said the budget would cut crop insurance by about 30% and eliminate export initiatives that enable US soybeans to be sold to emerging markets.

"The proposed cuts in crop insurance and farm programs make this budget a non-starter. We’ve opposed cuts to crop insurance from Republican and Democratic administrations alike," he said.

"We strongly urge Congress to push this budget to the side and continue to advance practical farm policy."

On Monday, President Trump issued his FY2019 budget – an illustrative policy document that carries no legal force as Congress have authority over budget issues.

In it, he has proposed a 15% cut, or $3.5 billion, to the USDA budget in addition to targeting the crop insurance program through limiting eligibility to wealthier farmers and capping premium subsidies by setting a limit of underwriting gains at 12%.

Under Trump’s budget, the average premium subsidy for crop insurance would fall from 62% to 48%, according to the policy document released Monday.

While opponents of the program claim it gives farmers an incentive not to mitigate risk, proponents say farmers need the subsidy to survive.

Resistance

With a new Farm Bill expected to emerge later this year, the policy proposal is likely to meet resistance, with chairs of both the House and Senate Agriculture Committees opposing talk of subsidy cuts.

"We are committed to maintaining a strong safety net for agricultural producers during these times of low prices and uncertain markets and continuing to improve our nation’s nutrition programs," said Agriculture Committee Chairman Pat Roberts and House Agriculture Committee Chairman Mike Conaway in a joint statement.

The timing of any cuts couldn’t be worse for farmers of soybeans, which for the first time are expected to overtake corn in terms of planted acreage.

And it also comes at a time when there is talk of an escalating trade war between China and the US, which could involve soybean exports to the world’s biggest buying nation.

Citing anonymous sources that it said were familiar with the matter, Bloomberg News reported last week that China was studying the impact from restricting imports of US soybeans on the grounds that their production is subsidized.