April 7, 2000

Senate approval of a new federal crop insurance program is a positive step toward improving the financial position of farmers and ranchers, said the president of Texas’ largest farm organization.

"At present, the federal crop insurance program does not work well," said Donald Patman, president of the Texas Farm Bureau. "Reducing premiums and expanding the program to crops and producers not previously covered will provide some badly needed risk management tools for farmers and ranchers."

The Senate overwhelmingly approved the crop insurance reform bill by a vote of 95-5.

"Crop insurance is obviously an extremely vital part not only of a safety net, but also as part of an overall marketing strategy," said U.S. Sen. Dick Lugar, chairman of the Senate Agriculture, Nutrition and Forestry Committee. "Throughout our debate on risk management, we have emphasized marketing strategies because they are essential for most farmers to make a profit and to support their families."

S. 2259 would provide $6 billion additional funding for crop insurance and other risk management activities over a four-year period beginning Oct. 1, or in time for the 2001 crop year. It would provide increased federal subsidies for crop insurance premiums, thus making federal crop and revenue insurance policies more affordable for farmers, particularly at higher levels of coverage.

The bill would also institute a pilot program for direct risk management assistance for farmers who forego crop insurance subsidies, and who then employ two of 12 risk management options.

In addition to cutting premiums by up to 50 percent on some policies, the legislation offers insurance for the first time to livestock producers and would expand coverage for fruit and vegetable growers.

"When this bill becomes law, the chances for widespread producer participation are greatly increased," President Patman said.

The bill passed the full Senate with few changes from the version that recently passed the Senate Ag Committee.

One adopted amendment, however, would allow licensed cooperatives to sell insurance and pass along profits to cooperative members in the form of patronage dividends. Another amendment was designed to increase crop insurance participation in the Northeast.

U.S. House Agriculture Committee Chairman Larry Combest (R-Tex.) said a House-Senate conference would convene soon to finalize the legislation. His goal is to make expanded livestock and market revenue coverage available beginning with winter wheat crops seeded this September.

Combest said he views the similarities in the House version, "The Agricultural Risk Protection Act of 1999" (H.R. 2259) and the Senate version, "The Risk Management for the 21st Century Act" as good news for enacting expanded and affordable coverage for all producers.

"House and Senate have the makings of a vastly-improved safety net that has the permanent, long-term budget commitment of Congress to advance the producer’s management control over risk from weather and markets," Rep. Combest said. "Preparations are underway for the House-Senate conference to meet soon to come together with our mutual objective of crop insurance reform. This measure offers the opportunity for better risk management decisions, best made by producers, selecting the coverage they’ve told us they need."