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Published February 20, 2012, 01:07 PM

Crop insurance role in farm bill?

SCOTTSDALE, Ariz. — The crop insurance industry should help Congress write a farm bill in 2012, but also should think about its role longer term as crop insurance becomes the “foundation” of the farm program, a former U.S. Department of Agriculture official who is a top aide to Senate Agriculture Committee Chair Debbie Stabenow, D-Mich., said at a crop insurance industry convention in Scottsdale, Ariz.

By: Jerry Hagstrom, Agweek

SCOTTSDALE, Ariz. — The crop insurance industry should help Congress write a farm bill in 2012, but also should think about its role longer term as crop insurance becomes the “foundation” of the farm program, a former U.S. Department of Agriculture official who is a top aide to Senate Agriculture Committee Chair Debbie Stabenow, D-Mich., said at a crop insurance industry convention in Scottsdale, Ariz.

“We have got to get this farm bill done — for the certainty of the farmers, but also because it is not going to get any easier,” said Jonathan Coppess, who ran the Farm Service Agency early in the Obama administration and now is chief counsel to the majority on the Senate Agriculture Committee.

Extending the current farm bill would not be easy, he said.

Coppess said he thinks the Senate and House agriculture committees can use a lot of the bill that was prepared for the failed joint committee on deficit reduction, but that there is still controversy over the content of the commodity title.

While farmers and policymakers have agreed that direct payments have become “indefensible” and that crop insurance should play a central role, he said, they must still deal with “uninsurable risks” such as producers with thin margins or several years of low yields.

Discussing the schedule, Coppess said that after Stabenow holds four hearings including one on the commodity title, “the crystal ball gets a little cloudy.” He said he is not sure when a markup will be held, but that Stabenow wants to move quickly to get a bill approved in committee this spring and to the Senate floor and get it passed so that the House can work on it.

Coppess said agreement on the commodity title “is closer than the way it sounds in the press,” but that “there are things we have to work out.”

But he also told the insurance company executives, reinsurers and agents gathered here that they need to think long term, because the Congressional Budget Office has estimated that the cost of the program over the next 10 years will be $90 billion, more than either traditional farm subsidies or conservation programs.

“There are goods and bads” to that position, Coppess said. “You are rocketing to the No. 1 place. It is to be commended but it should also give you some concern. We don’t know how sustainable that is. After we get through this farm bill we have a lot more work to do. As you become the foundation of this for farmers there are some negatives.”

Coppess noted that the traditional Title I subsidy programs have gone through caps on payments, adjusted gross income eligibility requirements and conservation compliance.

“What happens as programs change, new ground coming into production — what are conservation practices on that land?”

He noted that on the direct payment and the ethanol tax credit, farm groups have previously decided to “stake out the position, hang on to it, and fight, fight, fight,” but that they eventually got backed down.

Crop insurers should utilize their knowledge for the program to work because “we want to see these programs working well for farmers,” Coppess said.

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