USDA's Jim Miller aims to make farm programs less complex, more cost effective
By Jon H. Harsch
© Copyright Agri-Pulse Communications, Inc.
Washington, June 17 – USDA Under Secretary for Farm and Foreign Agricultural Services Jim Miller told House Agriculture Committee members Thursday that implementing the 2008 Farm Bill is nearly complete – and that one USDA goal is to simplify farm programs.
Citing the undersubscribed ACRE and slow-paying SURE programs as examples of complexity, Miller said USDA is working on ways to “take some of the complexity out of how we operate these programs” and to generate savings from eliminating overlap. He said that along with simplifying rules to benefit both producers and USDA staff trying to implement complex programs, USDA is seeking producer input. In the case of the Federal Crop Insurance Program, he said one issue is yields. He pointed out that “a significant shortcoming of the current yield adjustments is that they are not equitable across producers, as they generally rely on the average yield for the county. This makes them less effective for the more productive producers with above-average yields and potentially overly generous for the less-productive producers with below-average yields.”
Miller said that in the case of issues such as yield adjustments, low crop insurance participation in some regions and among specialty crop producers, and limited coverage options for organic farmers, USDA is actively seeking new ideas from all interested parties. He reported, for instance, that the Federal Crop Insurance Corporation Board has received “16 Concept Proposals and approved eight for advance payments totaling approximately $925,000. Recently approved plans of insurance provide coverage for apiculture (bees), cottonseed, fresh market beans, oysters, and processing pumpkins.” He also pointed to a pilot program in North Dakota which “allows for mitigation of the impact of declining yields on an insured’s insurance guarantee by using the insured’s own production history average in lieu of the county T-Yield.”
Rep. Jerry Moran (R-KS), Ranking Member of the House Agriculture Subcommittee on General Farm Commodities and Risk Management, questioned Miller closely about the USDA's proposed new crop reinsurance agreement designed to cut USDA costs by $6 billion. Moran wanted assurances that the cut won't reduce the Farm Bill baseline. Miller responded that along with doing all it can to protect the baseline, USDA at the same time recognizes that “addressing the federal deficit is a significant priority” – and that $4 billion of the expected $6 billion in savings will go toward deficit reduction while the remaining $2 billion “will support high priority risk management and conservation programs.”
Moran also questioned Miller about USDA's plan to limit agents' commissions for selling crop insurance policies, saying USDA shouldn't be “dictating how a business should be run.” Miller responded that he would agree “if this were purely a private insurance program.” But Miller said that since USDA has a major role in providing crop insurance, “We have a responsibility to ensure as best we can that the companies in this program are financially sound” – and that no more insurance companies are forced out of business by paying excessive commissions.
Enrollment in the Average Crop Revenue Election (ACRE) continues to fall below expectations. Agriculture Undersecretary Jim Miller said 4,000 farms joined ACRE this year, adding to the 129,000 farms enrolled in ACRE last year. That amounts to about 14 percent of land eligible for farm program payments. USDA had estimated that 25% of eligible land would enroll in 2009.
For Stewart Doan's audio report on the House hearing, go to: http://www.agri-pulse.com/uploaded/HouseAg061710.MP3
To read Under Secretary Miller's 25-page June 17 written testimony, go to: http://agriculture.house.gov/testimony/111/h061710/Miller.pdf
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