Ohio Valley Farmers, Electric Cooperatives Push Back On Trump’s Budget Cut Proposals


West Kentucky Soybean Farmer Jed Clark, like many Ohio Valley farmers, is in a tighter financial situation because tariffs from the trade war and market forces have depressed crop prices.

“We’ve had a collapse in our grain markets,” Clark said. “We’re seeing some of the lowest commodity prices for wheat we’ve seen in a long time.”

The Trump administration’s budget proposal for fiscal year 2020 would cut U.S. Department of Agriculture funding by 15 percent. That includes a proposal to reduce the amount of subsidies farmers receive to afford crop insurance, which can cost thousands of dollars depending on the crop. Farmers would have to pay for 52 percent of their crop insurance instead of 38 percent.

“Taking that subsidy away and having a ten percent increase [in insurance cost] over quite a few acres has to be quite a bit of money,” Clark said. “Anytime we start increasing and putting more burden on the family farms to do this, it hurts the family farms.”

USDA data show farmers in Ohio, Kentucky and West Virginia in 2018 received more than $240 million dollars total in crop insurance subsidies.

University of Kentucky Department of Agricultural Economics Dean Barry Barnett said the cut in crop insurance subsidies is surprising to him given Trump’s vocal support for farmers, but it isn’t anything new.

“This really isn’t a partisan thing,” Barnett said. “It’s really been more of a situation where administrations have been proposing these budget cuts for several years now, and Congressional appropriators have refused to go along with those proposed cuts.”

Trump proposed crop insurance subsidy cuts in his 2019 budget proposal, and President Barack Obama proposed similar cuts in 2016.

Also earmarked for elimination is the Rural Economic Development Loan and Grant Program, also known as REDLG. The program gives up to $300,000 grants to local utility companies that then use the funding to give loans to rural businesses and communities to help them expand.

Loan recipients then pay back the low-interest loans to the utility, which the utility can then use to give out more loans, what’s known as a “revolving loan fund.”

Midwest Electric Cooperative CEO Matt Berry in northwest Ohio said they’ve received three grants from REDLG over the past 20 years worth $750,000 dollars.

He said the money has helped jump-start businesses including a local brewery, an ice cream shop and a company that makes standing desks. He estimates more than 300 jobs have been created from funded projects and that the program is a “no-brainer.”

“I hope it’s just a lack of understanding on the administration’s part because they may be just looking at the initial cost and not the full impact of the program,” Berry said. “It’s a huge benefit.”

Berry said because this is just a proposal, he hopes Congress will reject the elimination later this year.