The House and the Senate have come to an agreement that would avoid more than $3 billion in cuts to the nation’s crop insurance program as part of the budget package. The agreement follows a tumultuous three-day fight over the bill’s inclusion of the proposal that would have accomplished the cuts by reducing the rate of return for crop insurance companies from 14 percent to 8.9 percent.

The cut remains in the version of the budget passed by the house and currently before the Senate, but House and Senate Agriculture Committee leadership met with Congressional leaders and secured an agreement to eliminate the cuts as part of an omnibus spending bill later this year.

The American Soybean Association remains in trust-but-verify mode on the issue. While we are happy to see an agreement to remove the cuts, the language still remains in the bill, and we will watch House and Senate leaders closely to ensure that the agreement is honored and the cuts eliminated.

Compounding the pain of the proposed cut, agriculture is facing FY-2016 sequestration. While defense and most other domestic spending are exempted from this 6.8 percent cut in the bill, agriculture spending, including payments through the Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) programs, are not.

The cuts would have a distinct impact on farmers. Consolidation is already occurring in the crop insurance industry, and this will only speed up that consolidation, which will mean fewer choices and a less efficient private sector delivery system for producers.