Stenholm Looks To Crop Insurance Bill As Vehicle For Change

July 15, 1999

Rep. Charles Stenholm (D-TX) is thinking of trying to attach an amendment to the House crop insurance reform bill that would implement supplemental income payments for farmers when prices decline below a percentage of the five-year average price. He sees it as protection against volatile crop prices.

Crop or revenue insurance may protect farmers from yield or price declines within a particular growing and marketing season, but farmers are not protected from declines in prices from year to year, Stenholm reasons. Producers need a program to address sharp year to year price variations, particularly from external market factors such as the Asian financial crisis or exchange or interest rate variations.

Supplemental income payments would be made to producers of a loan-eligible crop - wheat, feed grain, cotton, rice and oilseeds - when the current year's national gross revenue of a commodity declines below 85% of the average national gross revenue of the previous five years. Gross revenue for each crop would be adjusted for changes in harvested acreage.

Payments could be made using the same documentation and procedures used to provide loan deficiency payments. Producers would be paid on their harvested production. Producers with reduced yields could receive payments on yields below actual production history, using a loss adjustment as documentation of lost production.

House Agriculture Committee Chairman Larry Combest (R-TX) has said a crop insurance reform bill would be on the House floor by the August recess. However, the committee still has to mark up and report a bill. Stenholm, the ranking Democrat on the committee, could try to have his supplemental income payment included in the bill, according to an aide.