Farm Bill Hearing Focuses on Risk Management

Testimony before the Senate Agriculture Committee centered on mitigating risk.

Published on: Aug 29, 2011

Last week the Senate Agriculture Committee held a Farm Bill hearing in Wichita, Kan. The committee heard testimony from many farm leaders and risk management was a recurring theme among the remarks.

Steve Baccus, president of the Kansas Farm Bureau, told the committee that the organization's member adopted policy is generally support of developing the next Farm Bill to preserve the principles of the 2008 bill. He said that essentially there were two items critical to American agriculture he wanted to impart to the committee.

"American agriculture relies on a strong safety net," Baccus said. "In today's market, that consists primarily of crop insurance and direct payments. Crop insurance allows us to manage risk and protect revenue on our farms. Depending on who you ask, recent cuts have resulted in between $12 billion and $20 billion in savings. Additional cuts will result in either increased premiums to producers or reductions in the number of products available. We cannot afford this kind of weakening of the safety net in today's market."

Baucus said American agriculture can remain viable and sustainable only when given the opportunity to operate in an environment free from burdensome and costly regulations.

"Currently federal agencies have proposed rules or drafting guidance on a significant list of topics that quite literally would make continuing the family farm a daunting task," Baccus said. "Efforts to inject common sense into regulatory schemes will go far in ensuring that we as producers can continue our efforts to provide safe, affordable and abundant food both at home as well as abroad."

Also addressing the hearing was Ken McCauley, representing the Kansas Corn Growers. A former president of the National Corn Growers, he testified prior to the writing of the 2008 Farm Bill. He said that at that time loan deficiency and counter cyclical portions of the bill were relevant, whereas today a farmer would go broke before those programs would kick in. Still he said that there is need for risk management.

"My need for risk management is different than my son's," McCauley said. "I think it is a vital tool for all farmers, but especially our young farmers. We need to continue crop insurance for that reason."

When asked by Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., how crop insurance could be strengthened, McCauley said that keeping it affordable is crucial. Several other witnesses talked about the need to stop cutting from the program. More than $6 billion has been cut during each of the last two years and farmers cannot afford to have continued cuts from crop insurance.