Producers and crop insurance industry representatives implored a House Ag subcommittee Wednesday to protect the program from cuts in the upcoming farm bill.
Some witnesses at a hearing before the House Subcommittee on General Farm Commodities and Risk Management offered areas where policies could be expanded, offering a challenging request for lawmakers faced with the prospect of no new money being added to the funding baseline of the legislation.
“Simply put, the public-private partnership works and plays a significant role for agriculture in the wake of natural disasters,” Tom Haag, first vice president of the National Corn Growers Association, said at the hearing. He said NCGA’s recent Washington fly-in reinforced the group's “number one priority is to protect crop insurance from harmful budget cuts and reforms.”
Witnesses also took issue with the idea of cutting premium subsidies. A study released by the National Sustainable Agriculture Coalition this week said that capping subsidies at $50,000 per farmer would save $16.6 billion over 10 years and affect only 3.5% of farms. When asked for her opinion on the such a cap by Pennsylvania Rep. Glenn Thompson, the ranking Republican on the full committee, Texas crop insurance brokerage owner Kathy Fowler was blunt.
“I can give it to you pretty short and straight: absolute nonstarter,” said Fowler, who was testifying on behalf of the Crop Insurance Professionals Association.
The NSAC study evaluated a range of possible cuts, including subsidy reductions based on a farmer's adjusted gross income.
Robert Haney, the CEO of AgriSompo in West Des Moines, Iowa, who was testifying on behalf of the Crop Insurance and Reinsurance Bureau and the American Association of Crop Insurers, said the program’s requirement for actuarial soundness means smaller producers would see higher premiums, if larger growers paid less into the program, or exited it all together.
“If you start removing larger bulk premiums at the top end, it will have a dramatic effect on the smaller producers and the smaller premiums; They’ll have to carry, if you will, the load of the loss ratios,” he said.
The concern was shared by Georgia Rep. Austin Scott, the subcommittee's ranking member. He cited the current war in Ukraine and the food security implications it has raised as a big reason to keep the program largely intact.
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“The proposals that come before this committee from groups on the far right and the far left that would effectively disincentivize those farm families to purchase crop insurance are detrimental to the whole ag industry and the food supply of this country,” he said.
Some witnesses did offer ideas to expand the existing coverage, particularly in the wake of storms that could impact the nation’s cotton crop. Georgia producer Lee Cromley said while existing coverage is in place to help cotton producers hit by hurricanes, he said the Hurricane Insurance Protection-Wind Index policy could also use some expansion to also cover the effects of tropical storms and depressions.
Cromley also suggested the creation of a multi-peril crop insurance product that “gives growers credit for the crop that is in the field instead of only crediting growers for their annual production history.”
Climate was another frequent topic at the hearing, one that witnesses and Republican members of the committee stressed should remain separate from crop insurance concerns.
Thompson, who would be in line to chair the committee during the upcoming farm bill process should Republicans win control of the House in November, said climate-focused efforts should be addressed through conservation programs rather than crop insurance. There have been proposals to tie crop insurance coverage more closely to practices that reduce carbon emissions and improve soil health.
“I’m confident if the data supports it, and agronomic conditions allow it, farmers will naturally gravitate toward adoption of the practices best for their farms. We don’t need to use crop insurance as a carrot – or worse, as a stick – to force their hand," Thompson said.
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