The Farm Credit Council, along with a group of leading agriculture and commodity groups, has urged House members to oppose an amendment to H.R. 1947, the 2013 farm bill, which would make crop insurance protection unaffordable and reduce program participation
The Farm Credit Council Urges House Members to Oppose Amendment That Would Limit the Effectiveness of the Federal Crop Insurance Program
Senate Majority Leader Harry Reid (D-NV) on Wednesday introduced a motion to for the Senate to proceed to consideration on the farm bill, S. 954, on Monday, May 20. The motion was agreed to by unanimous consent.
Today, Chairman Frank Lucas of Oklahoma and Ranking Member Collin Peterson of Minnesota issued the following statements after the House Agriculture Committee approved H.R. 1947, the Federal Agriculture Reform and Risk Management (FARRM) Act of 2013, by a large, bipartisan vote of 36-10. Committee Members also adopted, by voice vote, an en bloc amendment.
“I am proud of the Committee’s effort to advance a farm bill with significant savings and reforms. We achieve nearly $40 billion in savings by eliminating outdated government programs and reforming others. 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. I appreciate the efforts of my colleagues and the bipartisan nature in which this legislation was written and approved. I look forward to debating the bill on the House floor this summer,” said Chairman Frank Lucas.
“I’m pleased the Committee was able to work together, find some common ground, and advance a five-year farm bill today. Needless to say this process has gone on far too long and it is past time to get this bill done. With today’s action, I’m optimistic the farm bill will continue through regular order and be brought to the House floor in June. If we can stay on track, I think we should be able to conference with the Senate in July and have a new five-year farm bill in place before the August recess,” said Ranking Member Collin Peterson.
More information from the House Agriculture Committee.
The Senate Agriculture Committee today on a 15-5 vote approved its version of a five-year farm bill. The House Agriculture Committee is set to mark up its version tomorrow.
“The Agriculture Reform, Food and Jobs Act of 2012 will save taxpayers billions of dollars while promising a safe and healthy national food supply,” Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI) said in a statement. “By eliminating duplication, and streamlining and consolidating programs, we were able to continue investing in initiatives that help farmers and small businesses create jobs. This bill proves that by working across party lines, we can save taxpayer money and create smart, cost-effective policies that lay the foundation for a stronger, more prosperous economy. I am proud that once again the Agriculture Committee was able to work together in a bipartisan way to complete major reforms that save money and grow our economy.”
To view a copy of the Agriculture Reform, Food and Jobs Act of 2012, including the amendments that were accepted by the Committee, please visit the Senate Agriculture Committee website at http://www.ag.senate.gov/issues/farm-bill. A section-by-section summary of the bill is also available as well as an archived webcast of the markup procedures. A short summary of the bill is available here.
The Blue Ribbon Tastes from Farm Credit event was held today on Capitol Hill. Menu and farm market items featured at the reception, held in the House Agriculture Committee hearing room, were provided by Farm Credit customer-owners in Delaware, Maryland, Pennsylvania, Virginia and West Virginia.
The Senate Agriculture Committee has set a hearing for Tuesday, May 14 to review the 2013 farm bill. The hearing will take place at 10 a.m. For more information, visit: http://www.ag.senate.gov/hearings
The Farm Credit Council joined with a large and diverse coalition of agriculture, insurance and financial groups to voice support for crop insurance and to urge the Senate Agriculture Committee to reject any new farm bill provisions that might limit its effectiveness.
“Limiting crop insurance support to producers of a certain size creates barriers to participation for producers trying to obtain this risk management protection and impacts the financial health of the agricultural community,” the letter stated.
Without the risk protection provided by federal crop insurance, agricultural lenders would be forced to increase underwriting standards, increase costs to offset risk and reduce credit availability in some areas of the country to some producers, the group said.
As with other lines of insurance, crop insurance requires a broad pool of participants to function properly, the letter said.
“Means testing unfairly discriminates against full-time farms and those producing higher-value crops, such as specialty crops,” the group stated. “Making crop insurance protection unaffordable would cause producers to reduce their program participation, resulting in a higher risk pool of insured producers, higher loss ratios over time, and increased premium rates for those that remain in the program.”
Limiting crop insurance protection would also increase the likelihood of calls for ad-hoc disaster assistance, which were not heard during the 2012 crop year, the letter said.
White House Budget Proposal Calls for Eliminating Direct Payments, Reducing Crop Insurance Subsidies
President Obama’s budget proposal released yesterday calls for providing $22.6 billion in discretionary funding for the Department of Agriculture, roughly equal to the 2012 enacted level, while reducing the deficit by $37.8 billion over 10 years by eliminating direct farm payments, decreasing crop insurance subsidies, and targeting conservation programs.
Crop Insurance — The 2014 Budget includes several legislative proposals to reduce the premium subsidies farmers receive on their crop insurance policies:
Reduce the subsidy for producer premiums by 3 percentage points for policies where the Government subsidizes more than 50 percent of the premium (previous proposals reduced these by only 2 percentage points). The reduced premium levels will still provide a reasonable level of subsidy to the farmer, but not be overly generous, and the safety net will remain intact. This is expected to save $4.2 billion over 10 years.
Reduce premium subsidy by 2 percentage points for revenue coverage that provides protection for upward price movements at harvest time. This proposal de-emphasizes the insuring price protection on the futures markets in favor of insuring expected returns for the actual crop at the time of planting. This is expected to save $3.2 billion over 10 years.
As crop insurers prepare for the Farm Bill and funding deliberations in the future, National Crop Insurance Services (NCIS) has released a detailed question-and-answer resource laying out the facts about crop insurance and dispelling some of the most common arguments against crop insurance put forth by its critics.
“Crop insurance is the single most important risk management tool available to farmers today, and the public needs to understand why it is so valuable, how it benefits taxpayers and how it helps maintain a stable agriculture for the benefit of consumers,” said Tom Zacharias, president of NCIS.
“Crop Insurance: Just the Facts” is housed in a new tab on the Crop Insurance Keeps America Growing website page “About Crop Insurance” where it will be a continuously updated, convenient and accurate resource for industry, farmers and consumers. “This resource will provide a much-needed explanation on the value and need for crop insurance,” said Zacharias.
The series covers important topics such as how crop insurance benefits the public, economics of the industry, the globalization of risk management, benefits to producers, and many other important issues.
Zacharias noted that when it comes to the mechanics of crop insurance policies, why farmers spent more than $4.1 billion out of their own pockets last year purchasing it, and why it is the risk management tool of the future, there is a lot of misinformation and misrepresentation about the program. “Crop Insurance: Just the Facts,” lays out the details and does provides a balanced and reasoned perspective,” he said.
As of mid-August 2012, 43 percent of farms in the United States were experiencing severe or greater levels of drought and another 17 percent were facing moderate levels of drought, according to figures from USDA’s Economic Research Service.
A striking aspect of the 2012 drought was how the drought rapidly increased in severity in early July, ERS said, during a critical time of crop development for corn and other commodities. The chart above shows the progression from mid-June to mid-August of severe or greater drought within the agricultural sector.
From mid-June to mid-August, the share of farms under severe or greater drought increased from 16 to 43 percent of all farms. Total cropland under severe or greater drought increased from 20 to 57 percent, while total value of crops exposed increased from 16 to 50 percent. As of mid-July, areas with over half of the value of cattle production were already exposed to severe drought; by mid-August, almost two-thirds were exposed.
The U.S. Farmers & Ranchers Alliance (USFRA) announced that Chris Chinn (Mo.), Will Gilmer (Ala.), Katie Pratt (Ill.), and Bo Stone (N.C.), have been selected as the winners of its Faces of Farming & Ranching program, a nationwide search launched in summer 2012 to help put real faces on the American agriculture industry. More than 100 applications were submitted from passionate, dedicated farmers and ranchers across the country.
The winners will act as national spokespeople, and will share stories and experiences on a national stage to help answer consumers’ questions about how food is grown and raised to feed our nation.
“The four winners selected are passionate about farming and ranching, and eager to share their stories about the innovative ways they continue to improve food production each day,” said Bob Stallman, chairman of USFRA and president of the American Farm Bureau Federation. “There are a lot of misconceptions and questions among consumers about how food gets from the farm to our tables. These four individuals are equipped with the passion and experience necessary to address these complicated issues and give honest answers.”
The Food Dialogues is a site created and managed by the U.S. Farmers & Ranchers Alliance to answer Americans’ questions about how food is grown and raised. Farm Credit is part of the coalition of farmers, ranchers and industry partners helping to bring together different viewpoints on agriculture and the future of food and to answer consumers’ questions about how their food is grown and raised.
At its recently completed organizational meeting, the Board of Directors of The Farm Credit Council elected Mary Fritz of Chester, Montana, as Board Chair – the first woman to lead the Board in the Council’s 30 year history – and Curtis Hancock of Fulton, Kentucky, as Vice Chairman.
Fritz has served on the board of CoBank since 2003 and is currently Second Vice Chair of the CoBank Board. She is a former chair of the Northwest Farm Credit Services board. She joined The Farm Credit Council Board of Directors in 2008. Fritz is the owner and operator of Quarter Circle JF Ranch, Inc., a dry land grain and cow-calf operation in Chester, Montana.
Hancock has farmed since 1975 and operates a 5,000-acre farm that produces corn, soybeans and wheat. He is Vice Chair of Jackson Purchase ACA and is also Vice Chair of the Board of FCCServices. He has served on the Council Board since 2003.
The Farm Credit Council Board elected the following directors to join Fritz and Hancock on the Council’s Executive Committee:
- Mike Garnett, the immediate past Chairman of The Farm Credit Council. Garnett raises cattle and has a custom haying and bailing business in Spearman, Texas. Garnett has served on the board of the Farm Credit Bank of Texas since 1999.
- Doug Felton, of Cannon Falls, Minnesota. A grain farmer, Felton was elected to the AgriBank Board in 1996.
- Tom Klahn, of Lodi, Wisconsin. Klahn operates a farm producing corn, soybeans and vegetables, and was elected to the AgriBank Board in 2002.
The Farm Credit System today reported combined net income of $4.118 billion for
the year ended December 31, 2012, as compared with $3.940 billion for the prior year. The
System also reported combined net income of $960 million for the fourth quarter of 2012, as
compared with $946 million for the fourth quarter of 2011. (Full news release from the Federal Farm Credit Banks Funding Corporation.)
January 8 is the last day for online registration to attend The Farm Credit Council’s Annual Meeting, February 10-12, 2013, in San Diego. If you require assistance with making new or updating previously completed registrations, please contact Dylan Price at email@example.com or 202-879-0849.
The House voted 257-167 late Tuesday evening to pass a fiscal cliff bill, which included language to extend the 2008 farm bill for nine months. The Senate earlier voted 89-8 to approve the bill. It now goes to President Obama for his signature.
Passage of the farm bill extension will answer some immediate questions for agriculture, but as of today leaves many questions unanswered regarding a path forward for a full, five-year farm bill.
Under the fiscal cliff deal, the direct payment program would continue for at least another year. The bill does, however, remove about $600 million in disaster aid. Improvements to the federal crop insurance program proposed under the House and Senate farm bills will not go into effect.
The Farm Credit Council continues to support a comprehensive, five-year bill. But as of now, the path to that full, five-year bill is unclear.
It appears unlikely that the House and Senate Agriculture Committees will repeat the full farm bill process, which included extensive field hearings covering more than a year. Many, but not all, of the key members who negotiated and voted on the House and Senate bills from 2012 will return in the 113th Congress.