Unfortunately, critics have filed short-sighted amendments that would return us to the days of 100% taxpayer-funded ad hoc crop disaster assistance and government delivery of crop insurance. In short, these amendments to impose means testing, cap premium support and cut private sector delivery create barriers to participation and jeopardize crop insurance protection, which is necessary for securing operating credit and producing our nation’s food supply.
An amendment by Representative Ron Kind and promoted by activist organizations sharply reduces the availability and affordability of crop insurance for farmers and ranchers and harms the rural economy. The Kind amendment will cause farmers and ranchers to reduce participation and result in greater financial disruption in agriculture. It increases the likelihood of greater government expense through costly ad hoc disaster bills, and it will result in increased premium rates for those smaller producers that remain in crop insurance. It also decimates the availability of insurance protection in high-risk states with a history of weather disasters.
The Kind amendment fails to recognize that USDA-approved private crop insurance providers are still adjusting to the cumulative effects of the more than $12 billion in legislative and administrative cuts to crop insurance since 2008, record claims in 2011 and2012, and USDA-mandated rating methodology changes.
An additional amendment by Representative Jim McGovern is similar to one that was soundly defeated in the Senate. The amendment restores funding cuts to SNAP (food stamps) by cutting crop insurance. The McGovern amendment targets specific crop insurance programs for elimination or reductions, including the Supplemental Coverage Option and the STAX program, and imposes cuts that severely threaten private sector delivery.
The transition away from traditional price and income support programs saves taxpayers $18 billion in the House Farm Bill and few tools remain to assist farmers and ranchers in managing the unique weather and market risks they face.
Crop insurance has emerged as the farm policy of the future. And it has become a rallying point. Fifty national and regional trade associations recently wrote Congress about the importance of crop insurance and their concerns regarding harmful amendments, many of which have been filed in the U.S. House of Representatives. These farm groups, lending organizations, input suppliers, processors, conservation groups, insurance and reinsurance organizations have clearly stated their support for crop insurance.
They know where the food on their plates comes from and you certainly won’t catch them complaining with their mouths full. For the sake of our farmers, and the future of our nation’s food supply, let’s hope Congress does, too.
Christy Seyfert is the Vice President of Federal Affairs for the Crop Insurance and Reinsurance Bureau.
For more information, visit www.FarmPolicyFacts.org.