Advertise in Print | Subscriptions
Published April 23, 2009, 07:40 AM

Farmers push for better federal crop insurance

Farmers and agriculture experts offered suggestions to improve the federal crop insurance program Wednesday at a House subcommittee hearing. Although they said the program has weaknesses, witnesses at the Subcommittee on General Farm Commodities and Risk Management hearing agreed that federal crop insurance is the most important risk-management tool for farmers.

By: By Caitlyn Zachry, Scripps Howard Foundation Wire, The Jamestown Sun

WASHINGTON — Farmers and agriculture experts offered suggestions to improve the federal crop insurance program Wednesday at a House subcommittee hearing.

Although they said the program has weaknesses, witnesses at the Subcommittee on General Farm Commodities and Risk Management hearing agreed that federal crop insurance is the most important risk-management tool for farmers.

“One of the few things all producers can agree on is the desire to have a viable risk-management tool that would allow them to make sound economic decisions to protect their operations,” said American Farm Bureau Federation President Bob Stallman.

Representatives from the cotton, grain, peanut, sorghum, wheat, corn, soybean, sunflower, rice, sugarcane and dry bean industries testified at the hearing.

Within the last three years, crop insurance coverage has increased from $50 billion to $90 billion. Government costs for crop insurance also grew, prompting a Senate Budget Committee vote in March to cut federal crop insurance subsidies by $350 million over five years.

Agriculture Committee Chairman Rep. Collin Peterson, D-Minn., said the committee aims to increase the program’s efficiency as well as “justify its use of taxpayer dollars.”

Although he acknowledged the need to cut spending, a North Dakota farmer and employee of the National Corn Growers’ Association warned that further budget cuts would harm the Risk Management Agency’s ability to improve program deficiencies.

“NCGA is very concerned with proposed funding cuts that put at risk the progress made increasing overall producer participation and levels of coverage that have reduced the need for disaster assistance,” said Mike Clemens, a Wimbledon, N.D., resident and the vice chair of NCGA’s Public Policy Action Team.

While the regulatory agencies, RMA, the Farm Service Agency and the Federal Crop Insurance Corp., are “largely working,” former North Dakota Agriculture Commissioner Roger Johnson said the crop insurance program should be improved.

Johnson, the president of the National Farmers Union, said the industry’s “cherry-picking” process when providers offer insurance only in the states with the most stable crop conditions and the poor coordination between RMA and FSA need improvement. He also stressed that crop insurance is inadequate to address multi-year production drops.

“It has been three years since RMA issued separate contracts to develop solutions to this problem, yet nothing has been brought forward,” Johnson said.

Witnesses stressed that current standards do not adequately account for the unique risks associated with different types of farming. They asked that separate insurance be made available for spring versus winter wheat and for irrigated versus non-irrigated crops.

“We want coverage to more accurately reflect what is being put into the crop,” said Rickey Bearden, chairman of the National Cotton Council’s Crop Insurance Task Force. In addition, Steve Bennett, of Tennessee’s Riverbend Nurseries, said RMA professionals lack knowledge about some crops. After severe weather damage in 2007, some Tennessee producers of trees and other nursery plants were unable to recover insurance payments when RMA adjustors failed to understand that trees that appeared healthy and marketable after the storm weren’t.

“The answers provided by RMA at the time and in the months following were far from what we had expected,” Bennett said.

Despite program shortcomings, Stallman and other witnesses said structural changes including combining RMA and FSA are not needed to improve crop insurance efficiency.

Following the testimony, members of the subcommittee said they plan to send a letter to the RMA to check whether the agency is complying with the Farm Bill of 2008.

Rep. Jim Marshall, D-Ga., who chaired the hearing, and Rep. Jerry Moran, of Kansas, the senior Republican, said they would contact the agency soon.

“Unfortunately, some of this is testimony we’ve heard before,” Moran said.

Tags: