House Ag Subcommittee on General Farm Commodities and Risk Management Chair Leonard Boswell, D-Iowa, says he knows how important good crop insurance is to managing risk and getting through tough times on the farm. He says that's a lesson he learned as a farmer during the 1980s Farm Crisis. Boswell led a hearing to review current issues facing the U.S. crop insurance industry Thursday. He says it was an opportunity to get feedback about the kind of coverage farmers need, what the government can do to bolster their safety nets and the role of private crop insurance agents.
The recently renegotiated Standard Reinsurance Agreement was a main topic of discussion. The SRA governs the relationship between the federal government and private companies that deliver crop insurance products to farmers. Boswell has concerns regarding the SRA and the potential impact it will have on small rural communities. He says budgets are tight, but tight budgets shouldn't mean jeopardizing the risk management tools already in place or putting in question what improvements can be made in the future.
According to Subcommittee Ranking Member Jerry Moran, R-Kan., it was important to hold this hearing in the wake of the signing of the 2011 SRA. He said members of the Committee should have the opportunity to publicly voice their concerns and objections. He added Congress must exercise its oversight authority. He said doing so now will provide some idea as to what parts of the SRA must be closely monitored as it's implemented.
Congressman Earl Pomeroy, D-N.D., says the crop insurance program remains the most important risk management tool for producers. He says the SRA reduces the deficit by $4 billion, which is good for taxpayers and the long-term stability of the farm safety net program.
Several of the witnesses at the hearing did not share those sentiments. Various crop insurance agents testified that USDA missed the opportunity to strengthen the U.S. crop insurance program. Vice Chairman of the Crop Insurance Professionals Association Jordan Roach says USDA mishandled the recent Standard Reinsurance Agreement negotiation that shortchanged the ag budget and farmers by$6 billion. Roach says everybody lost in the renegotiation process.
Roach expresses confidence in the ability of the industry to be dynamic and continue to provide the highest quality service, but asked Congress to consider what it can be if forces join together to encourage USDA to expand quality coverage for all crops and improve the existing policies so all producers have viable options.