Crop Insurance

UPDATE: Crop Insurance Payments Will Be Restored in Future Bill

October 29, 2015 By Ron Sylvester Leave a Comment

A budget agreement negotiated between the White House and congressional leaders that was passed by the House yesterday did contain $3 billion in cuts to the federal subsidies for the nation’s crop insurance program, but, House ag interests said that the cuts will be rolled back in a future spending bill.

National Farmers Union President Roger Johnson voiced cautious optimism Wednesday night about the deal and said the agreement was led by the House Agriculture Committee.

“No one involved in agriculture was consulted when the budget was being negotiated,” said Johnson. “It’s outrageous to think that the agriculture committees were completely left in the dark, but we are thankful that the committee, its members, and other members of Congress stood up for a program that is critical to family farmers.”

Johnson noted that the 2014 Farm Bill provided $24 billion in savings, which accompanies the $12 billion in savings that was part of the 2011 renegotiation of the Standard Reinsurance Agreement (SRA). “While the rest of Congress has been paralyzed, the agriculture committees delivered savings in the name of deficit reduction,” he said. “It would be shameful to punish agriculture for doing its job over the last several years.”

Absent this deal, the budget would require $3 billion in cuts to the reimbursement rates between the government and the companies that sell and administer the crop insurance program. The cut, from 14 percent to 8.9 percent, is far deeper than the 12 percent of previous proposals. However, the average rate of return for participating companies has been less than 4 percent, causing many crop insurance companies to exit the sector.

“Caps already exist on administrative and operating costs for crop insurance companies, and producers pay an estimated $4 billion into this program annually. It’s time for Congress to realize that crop insurance is not a piggy bank,” noted Johnson. “We are thankful for our allies in the House and the leadership of Chairman Conaway and Ranking Member Peterson.”

“We now call on the Senate leadership to follow the House’s lead and reject cuts to crop insurance,” he said.

Budget Deal Contains Horrible Crop Insurance Provision

October 27, 2015 By Ron Sylvester 1 Comment

One would think that if Congress were to take $3 billion out of the private sector crop insurance delivery system there would be hearings and lots of work done on the economics of the proposal by both sides of the issue.

You would be wrong to think that, because tomorrow there will be a vote in the U.S. House to accept a budget deal which contains what amounts to a $3 billion cut in the crop insurance subsidies that are so critical to the U.S. farm safety net.

According to the legislative shop at the National Farmers Union, this bit of business is such a surprise that both the House and Senate Agriculture Committees are lining up to oppose the entire budget deal if it contains this cut. NFU staff are all hands on deck canvassing members of Congress and senators all day today to oppose the deal.

The national budget can’t be balanced on the backs of farmers. While it is true that this money will come out of the insurance industry, it’s also true that there will be a trickle down effect in rural America. The compromises that took so many years to forge in the last Farm Bill set up what is essentially a public-private system behind the safety net. It can’t just be torn down in a day.

Here’s a quote from an email I received today from a staffer at NFU that sums it up nicely:

While this is a direct hit to crop insurance companies, there can be no doubt about the trickledown effect onto the countryside. Consolidation is already occurring in the crop insurance industry, and this will only speed up that consolidation, which will mean fewer choices and a less efficient private sector delivery system for producers.

And, if you think that farmers haven’t already done their piece for the national budget, consider the two charts pictured here. They speak for themselves.

Call your member of Congress and both of our U.S. Senators – Sherrod Brown and Rob Portman. You may call the Capitol Switchboard at (202) 224-3121 and ask for your representative or one of the senators. Tell them to vote NO on the budget deal if it contains the cut to the Private Sector Delivery System to Crop Insurance.

This is horrible policy and should be a poison pill to kill the whole deal.

Here’s more information:

Ohio farmers urged to report crop losses, low yields to FSA

August 13, 2012 By Ron Sylvester Leave a Comment

With the continued hot dry weather conditions throughout Ohio, the Farm Service Agency (FSA) encourages farmers to document and report crop losses or low crop yields to their local FSA office.

Producers with crops covered by crop insurance and the Noninsured Crop Disaster Assistance Program (NAP) must report crop losses resulting from a weather-related disaster event within 15 days of the disaster or when the loss first becomes apparent. Prevented planting must be reported no later than 15 days after the final planting date.

Crop losses are acres that were timely planted with the intent to harvest, but the crop failed because of a natural disaster. It is important that producers file accurate and timely loss reports to prevent the potential loss of FSA program benefits.

[Read more…]

USDA, Crop Insurance Companies Providing Short Grace Period on Premiums

August 1, 2012 By Ron Sylvester Leave a Comment

USDA Secretary Tom Vilsack said today that crop insurance companies have agreed to provide a short grace period for farmers on insurance premiums in 2012.

To help producers who may have cash flow problems due to natural disasters, Secretary Vilsack sent a letter to crop insurance companies asking them to voluntarily defer the accrual of any interest on unpaid spring crop premiums by producers until November 1, 2012. In turn, to assist the crop insurance companies, USDA will not require crop insurance companies to pay uncollected producer premiums until one month later.

Obama Admin details new efforts to assist farmers and ranchers affected by drought

July 23, 2012 By Ron Sylvester Leave a Comment

USDA Secretarial Drought Designations by County, July 20, 2012

With 62 percent of U.S. farms currently affected by nationwide drought conditions, USDA Secretary Tom Vilsack announced today several ways in which the agency is attempting to make it easier for farmers and ranchers to get help.

“President Obama and I are committed to getting help to producers as soon as possible and sustaining the success of America’s rural communities through these difficult times,” said Vilsack. “Beginning today, USDA will open opportunities for haying and grazing on lands enrolled in conservation programs while providing additional financial and technical assistance to help landowners through this drought. And we will deliver greater peace of mind to farmers dealing with this worsening drought by encouraging crop insurance companies to work with farmers through this challenging period.”

The assistance announced uses the Secretary of Agriculture’s existing authority to help create and encourage flexibility within four USDA programs: the Conservation Reserve Program (CRP), the Environmental Quality Incentives Program (EQIP), the Wetlands Reserve Program (WRP), and the Federal Crop Insurance Program.

[Read more…]

Senate passes 2012 Farm Bill in bipartisan vote, 64-35

June 21, 2012 By Ron Sylvester Leave a Comment

Ohio Senators: Brown, a ‘yea,’ Portman, a ‘nay’

NFU supportive, process moves to a dysfunctional House

The 2012 version of the Farm Bill which delivers $23 billion in deficit reduction and moves the agricultural safety net away from direct payments and toward a beefed up crop insurance program as two of its major features passed the U.S. Senate today by a vote of 64-35.

Sen. Sherrod Brown, (D-OH), voted for the measure. Sen. Rob Portman, (R-OH), voted against the bill.

“The bipartisan, Senate-passed farm bill is the most significant reform of U.S. agriculture in decades – saving taxpayers $23 billion while investing in Ohio’s number one industry,” Brown said.

“This farm bill is forward thinking, yet realistic. The centerpiece of the bill’s deficit reduction efforts is based on a bill I authored with my colleague, Sen. (John) Thune, (R-SD) that would end the era of paying farmers for crops that they don’t grow and replace direct payments with market-based supports that’s more responsive to farmers and taxpayers. This farm bill is a jobs and innovation bill, an economic relief and development bill, and it affects every American every day,” added Brown, the first Ohioan to serve on the Senate Agriculture Committee in 40 years.

The National Farmers Union issued two statements today – one urging passage of the bill and one congratulating senators on the achievement after its passage. NFU President Roger Johnson said he’s pleased with many of the provisions in the Senate bill such as mandatory funding for renewable energy programs. Although supportive of the bill’s move away from direct payments to support agriculture in the U.S., Johnson remains concerned about long-term price declines.

[Read more…]

Senate Farm Bill Floor Debate Could Take 2 Weeks

June 11, 2012 By Ron Sylvester Leave a Comment

Legislative staffers for the National Farmers Union are watching the U.S. Senate closely over the next two weeks as the upper chamber takes up floor consideration of the 2012 Farm Bill.

The Farm Bill passed through the Senate Ag Committee in April and it passed a full Senate vote on whether to consider the massive bill on the floor with broad bi-partisan support late last week, 90-8.

NFU reports that senators may have as many as 300 floor amendments to offer on the bill, but that through behind the scenes negotiation the package of amendments will probably be cut down to 40 or less.

NFU President Roger Johnson recently lead a coalition of more than 125 food and consumer groups in calling for the Senate to quickly pass the 2012 Farm Bill – citing the fact that many current programs are expiring or are in danger of expiring.

“This strongly bipartisan bill ensures that agriculture does its part to reduce the deficit, cutting spending by $23 billion, while still maintaining a safety net that family farmers and ranchers need,” Johnson said.

“Some farm bill programs have already expired, and the rest expire on Sept. 30. It is critical to pass a farm bill as soon as possible so that Americans have the agriculture, conservation, environmental, forestry, hunger, and rural development programs that they need. While many of us will continue to work for improvements in the bill, we all agree that we need a farm bill this year,” Johnson said.

Most media reports of the Farm Bill’s move through the Senate have been focusing on the shift away from direct payments to farmers in favor of a larger crop insurance program. Farmers would be able to insure against poor yields and declines in prices as well as environmental calamity. Another hot topic is cuts to the food stamp program.

[Read more…]

Actions by Sen. Sherrod Brown and others could help bring crop insurance rates down

December 1, 2011 By Ron Sylvester Leave a Comment

WASHINGTON, D.C. – Following action taken by from U.S. Sen. Sherrod Brown (D-OH), the U.S. Department of Agriculture (USDA) announced that it would begin to update its methodology for setting crop insurance premium rates to ensure that corn and soybean producers throughout the Midwest pay lower, more-fair rates. The move follows a letter sent by nine senators, led by Brown, calling on the USDA to follow the recommendations of a 2011 independent study commissioned by the USDA’s Risk Management Agency (RMA). The study recommended changes to the methods used to calculate crop insurance premiums for corn and soybean producers, who pay a higher premium than they should in the Midwest when compared to relative risk.

“Crop insurance is a critical risk management tool for Ohio farmers, but Midwest producers have been shouldering more than their fair share of the burden for too long,” Brown said. “Beginning to update how crop insurance premiums are calculated is a huge win for Ohio farmers, but the USDA’s Risk Management Agency can and must do more. The recommendations of the independent study should be implemented promptly and in full.”

Under current methodology, crop insurance rates are set for producers using historical crop production and price data. Many experts have contended that farmers in Midwestern states like Ohio overpay for crop insurance because natural disasters are much less frequent than in other regions of the county. The RMA-commissioned study, released earlier this month, showed that the Midwestern corn and soybean farmers had a markedly lower risk for corn and soybean production than implied by current crop insurance rates.

In Ohio, the methodology adjustments announced today could reduce corn farmers’ rates by 7 percent and soybean farmers’ by 9 percent on average. Brown believes full implementation of the independent study’s recommendations could result in even greater reductions to premiums.

Ohio Senators: Brown, a ‘yea,’ Portman, a ‘nay’

NFU supportive, process moves to a dysfunctional House

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