Senators weigh options to improve risk management in the Farm Bill

By Sarah Gonzalez

© Copyright Agri-Pulse Communications, Inc.

WASHINGTON, March 15, 2012- The Senate Committee on Agriculture needs to balance several Farm Bill proposals and revenue protection plans before it begins marking up a Farm Bill to be optimistically passed this year. 

However, today's witnesses at the last 2012 Senate Farm Bill hearing “Risk Management and Commodities in the 2012 Farm Bill,” do agree that the federal crop insurance program should not be reduced and that safety net programs like the Supplemental Revenue Assurance Program (SURE) and Average Crop Revenue Election (ACRE) should be simplified and more efficient.

“Our farm policies must be effective and defensible, not just in this committee or to farmers but to the public at large,” said Chairwoman Debbie Stabenow (D-Mich.) “And that is why the era of Direct Payments is over.”

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Stabenow and Ranking Member Pat Roberts (R-Kans.) emphasized, as did most of the farmers, lenders and agriculture leaders on today's panels, that crop insurance is the cornerstone of a strong farm risk management plan, especially in times of unexpected disaster. 

“It is not because of some day-late or dollar-short ad hoc disaster package that farmers are back on their feet producing the food that feeds a troubled and hungry world,” Roberts said. “The more producers under that crop insurance tent and protected from disaster, the more stable our food supply and rural economies will be.”

Kansan farmer, Jarvis Garetson, testified that without the federal crop insurance program during the past year's extreme weather conditions and high input costs, he would “be having a farm sale this spring instead of preparing to plant the next crop.”

Garetson was one of several farmers at today's hearing to testify that federal crop insurance is the reason many farmers and ranchers are able to receive credit and operating loans. He agreed with Roberts when he said the private delivery system of crop insurance completes one of the most effective partnerships between the government and private sector. 

“Crop insurance is very efficient through our agents,” he added. “The delivery is very good and I would hate to see it move away from the private sector.”

While discussing the floating proposals that make adjustments to the crop insurance program, Senator Mike Johanns (R-Neb.) said he thinks adding too much to crop insurance products could be risky and “could disrupt that balance” in a product that farmers have learned to use effectively and efficiently.  

Chairman, President, and CEO of Farmers Mutual Insurance Company, Steve Rutledge, said the biggest fear he has about making adjustments to the federal crop insurance program is that “we would harm the program going forward.”

On improvements to the safety net programs of the Farm Bill, Acting Under Secretary for Farm and Foreign Agricultural Services, Michael Scuse, said that some 2008 Farm Bill programs are overly complex and difficult for the Farm Service Agency (FSA) to administer. ACRE and SURE required such an enormous amount of data for payments and information from producers that it “created a tremendous burden on staff at USDA to come up with an implementation process for those programs.” 

“I would encourage the committee to have programs as simple and as easy to understand going forward so we can implement them in a timely manner,” Scuse said.

Johanns suggested that instead of spending federal dollars on a program like SURE, “which farmers don't even support,” the government should invest that Farm Bill money into improving crop insurance. Although the SURE program is designed to supplement crop insurance and aid farmers in a time of extreme disaster, Johanns said it loses its appeal if farmers “are going to have to wait an eternity for help.”

“That's the complaint I've heard from the ag community as well,” Scuse said. “Because it's revenue based, we have to wait for the marketing year to end to determine what the revenue was. We're more than willing to work with the committee to determine what will better meet the farmers' needs.”

With only six percent of U.S. farmers under 35 years old, the Senators also addressed improvements that could encourage the next generations to become involved in agriculture. National FFA President, Ryan Best, said agricultural education programs like FFA lead youth into several agriculturally related careers, including production. 

“Agriculture as an industry is changing faster than policy can keep up with,” American Farm Bureau Federation President Bob Stallman said. “The best thing we can do for the future generation is build a business environment for them. You always want to be sure that government policy doesn't restrict what the market can offer.”


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