ASA Outlines Crop Insurance Reforms for Senate Ag Committee

first_imgThe American Soybean Association (ASA) last week outlined for the U.S. Senate Agriculture Committee a list of six specific Crop Insurance Program reforms that ASA views as necessary if crop insurance is to provide an adequate safety net for producers.ASA First Vice President Marc Curtis, a producer from Leland, Miss., told the Committee, “Soybean farmers across the country are facing the lowest prices we have seen in 23 years, and we have worries about world demand. The current program does not work for soybean growers in all states. It does not work in the places where risks are higher and management tools are most needed, like my home state of Mississippi.”Curtis told the committee that ASA believes an increase in the subsidy for higher levels of coverage is needed. Under the current program, with the decreasing subsidy at higher levels, producers are discouraged from purchasing higher levels of coverage.Another issue is the current rating system, which Curtis said relies on 20-year-old data that does not reflect recent trends in yield improvements and better production practices, nor increased participation in the crop insurance system. ASA believes expanding the universe of production beyond past crop insurance users is a good idea, he said.”With new seed varieties, improved farming practices like medium-till and no-till, our yields have improved,” Curtis said. “These improvements are very slow to be recognized by the current system.”Curtis outlined a third area of great concern: establishing production history on lands of beginning farmers and newly rented or purchased lands. The current system penalizes producers when they are farming new land, he said. With the current price situation, there is a lot of land changing hands and producers are forced to accept inaccurate country average transition yields, also known as “t” yields, as the basis for insurance coverage on new lands. “T” yields are often much lower than a producer’s own actual production history (APH), and with normal rotation it can take even longer to build an APH that reflects realistic production levels.In many cases, the new land is very similar to a producer’s existing land. Curtis explained that ASA suggests in these instances that producers should be allowed to utilize their own proven APH on the new lands. Another option would be to use the history established by the last producer who farmed the land, Curtis said. The producer should be able to use the higher of the two until his or her own production history for the new land has been established. A similar change could apply for new farmers also.”The current system discourages the use of crop insurance for new land, and even makes potential buyers or renters of land think twice,” Curtis said.Curtis also told the committee that ASA has determined that catastrophic (CAT) coverage offers little to no protection for soybean producers. ASA favors eliminating CAT coverage and applying the subsidy to the higher levels of coverage.Curtis explained that ASA believes there are several other issues that need to be addressed, one of which is particularly important to members in the northern tier states that have been hit hard by bad weather conditions. That issue is how crop insurance responds to multi-year disasters. Under the current system, multi-year disasters can devastate producers’ APH, and, thus, producers’ ability to get meaningful coverage through no fault of their own.”We must find a way to drop the lowest years or provide a floor on how low the APH can go after multi-year disasters,” Curtis said.Soybean growers also believe that revenue-type programs should be available for all producers growing major commodities, Curtis said. Producers want and need better tools for managing both yield and price risks. Crop insurance has the most potential for providing a safety net to producers.”I offer cooperation of our organization in working with you and anyone on the committee who is interested in finding a workable solution,” Curtis said.last_img read more