Farm Bill & Crop Insurance

Farm Bill & Crop Insurance

The Senate recently passed its version of a Farm Bill.  The House of Representatives is now beginning debate on its version of FARRM (Federal Reform and Risk Management Act) as developed by the House Agricultural Committee. Frank Lucas (R-Okla.), who with Collin Peterson (D-Minn.) has been a committee leader, is pushing for quick action---“headed out the door like a cat with his tail on fire,” as he puts it.  As many as two hundred amendments may be suggested, many of them designed to gut crop insurance—the last remaining safety net for farm families, an essential tool in a high risk trade. Lucas urges farm bill supporters to contact “those Congressmen and Congresswomen and Senators who maybe don’t live these issues on a day-to-day basis, the way we do” pointing out that the legislation “really does matter to every member who has people who eat in their district.”

Perhaps we can use the state lines that divide the farm belt all of us call home to advantage right now.  Each of us has some clout (whether we realize it or not) with legislators who serve our district, some, if not quite as much, with other representatives from our state, and much less beyond our home state boundaries. Each of our states has several representatives, some familiar with agriculture, many more not.  If each of us will get in touch with our local House member and two or three more from our state, we can move mountains.  Or at least a Farm Bill!

Even if the House somehow completes and passes its version in the next few days—a tall order—please get in touch with legislators and share your thoughts for there will be much work, and time, ahead devoted to reconciling the House and Senate versions and deciding how to respond to a veto threat from the Administration.  Your feedback matters!     

I am frustrated at the irresponsible rhetoric that legislators get bombarded with—“farmers are hoping for crop failures…” and much more of the same.  It makes me red hot….what’s the word?...angry.  Let’s do something about it!  Let’s, you and I, share the facts, and tell our true story right now, when the chips are on the table.  I hope you will write your Representative and others from your state, in your own words—farm families are respected and listened to.  That’s a fact. Here is some grain for your grist mill—hopefully you’ll find a few kernels that will help.

Farming, the last field in our country to be dominated by family businesses, is an inherently risky enterprise.  In our region this spring alone we have faced potential crop damage from hot weather early in the spring, late season frigid nights while wheat heads were forming, and lower than accustomed precipitation.  What we do is vital to the Northwest—agriculture is the largest employer in our three state region, farm exports are a cornerstone to our regional economy. 

Crop insurance is a remarkable public/private partnership and a good value for growers and consumers.  It has replaced emergency agriculture disaster bills—42 of them since 1989, costing $70 billion—an expensive, cumbersome, untargeted way of managing natural disasters, but the only tool that could be found when a crisis occurred. Many of us remember fighting those sometimes desperate battles! Congress decided to go with something more focused—to encourage farmers to purchase crop insurance so they’d have it in place when a natural disaster strikes. With 86% of farmland protected by crop insurance in ’12 there was no need, nor was there a call, for emergency help—even though the Midwest faced a punishing drought. Cynics who claim that farmers hope for disasters are hopelessly out of touch—in ’12 American farmers paid $4.1 billion in premiums and shouldered losses of $12.7 billion in covering deductibles, before receiving any proceeds.  Farmers, private insurance companies, and the federal government all together shouldered the loss.  The program worked as it needed to—farmers stayed in business, lenders were repaid, communities saved jobs.  

Crop insurance allows me, as a farmer, to make my own calls and to choose a plan tailored to my own farm and the level of risk I choose to accept.  Farmers have paid over $30 billion in premiums since 2000 and, fortunately, it most often proves to be risk assurance that, in hindsight, we didn’t need.  Between 2001 and 2010, the federal government received $4 billion more in premiums than were needed for loss coverage.  Crop insurance is a vital backstop against natural or economic disaster for farm families.  

The House FARRM budget calls for $40 billion (the Senate $23 billion) in savings over a decade.  As Agriculture Committee Chair Lucas puts it: “No other committee in Congress is voluntarily cutting money, in a bipartisan way, from its jurisdiction to reduce the size and scope of the federal government.”  The Senate and the House will have to reconcile different reductions in SNAP (food stamps).  Aside from that debate, the agricultural community has done its part in reducing spending to help lower the deficit.  Total government spending on farm safety net programs, including all commodity programs and crop insurance, dropped by two-thirds from fiscal year 2000 to fiscal year 2012. 

 The Farm Bill approved by the House Agriculture Committee strengthens and enhances crop insurance protection.  Please urge House members to oppose amendments that will limit its effectiveness, including caps, means testing, and enforced conservation compliance. As Bing Von Bergen, president of the National Association of Wheat Growers (NAWG) puts it, not only are programs already in place for highly erodible lands but “linkage is not necessary—conservation is who we are and what we do.” Amendments that discourage farmers from buying crop insurance shrink the overall risk pool and increase premiums for those who remain.  USDA has called a proposal to cap premium support “ill advised.” A means test would also impact the pool of participants nationwide. As NAWG’s president puts it:  “Congress should remember a simple saying that has been my north star through my life: ‘If it’s not broken, don’t fix it.’  Congress should do no harm to crop insurance.” 

There are, of course, other issues that matter in the small—but important—part of the FARRM bill that actually is focused upon production agriculture.  Public research spending, for instance, remains relatively static in the Senate and House Ag Committee versions.  Whenever someone I know outside our agricultural world shares with me fears of chemicals, GMO’s, gluten or God knows what, I suggest they get off their duff and urge Congress to invest more in public agricultural research—all of us in agriculture, whether producers or consumers—should unite behind sound science. Several other topics, too.  But crop insurance is the issue where your voice will have the biggest impact right now. 

There will be a process this summer by which the House and Senate refer their versions of FARRM to a committee to hammer out a consensus.  But getting crop insurance right in the House version will set the stage for what the final product looks like.

I want to encourage our customers and urge my 340 fellow McGregor employees to give some thought to the issues discussed here, to share your own views with members of the House of Representatives from your district and others from your state.  If I’ve learned anything since the first time I testified before Congress on farm issues 28 years ago, it is that farm families have clout and credibility. Those of us who serve farm families can—and should—pitch in and help, too.  Together we as agriculture are a powerhouse and usually win the day when we put our hearts into it. 

Here are two quick approaches to consider:  1) call the office of a Representative from your state, ask for the aide who specializes in farm policy and explain why crop insurance is important to you and must not be tampered with or 2) send an e-mail—only needs to be a couple of paragraphs long—asking them to vote for the FARRM bill but to oppose any measures that would harm a safety net important to farmers and consumers alike—crop insurance.

Contact List for Farm Bill, is a list of phone numbers and e-mail addresses of members of the House of Representatives from your home state.  Pulling together, we will win this battle. Dedicated people who care, about farm families, our greatest resource is part of our ‘brand’ as an organization and my McGregor colleagues and I will always be honored to do all in our power to help, whatever the opportunities and challenges that come our way producing bountiful crops on this special land. We’ll heat up the phone and e-mail lines!