Roberts, Kerrey Introduce Crop Insurance Bill

September 15, 1999

Sens. Pat Roberts (R-KS) and Bob Kerrey (D-NE) have introduced an expanded version of their earlier bill to overhaul the federal crop insurance program. The new and improved version encourages producers to assume risk management activities in addition to crop insurance and addresses perceived regional inequities in the program.

The bill introduced last March "did exactly what we expected: it initiated serious discussion on how to improve the crop insurance program," says Roberts. "We have received substantive input from the people those changes will impact most. While it is difficult to address the needs of all growers in the most agriculturally diverse country in the world, this expanded bill goes a long way toward making crop insurance more affordable and accessible to producers."

Among the bill's provisions:

--It encourages producers to increase their crop insurance coverage by inverting the current premium buy-down formula to make higher levels of coverage more affordable;

--It establishes an average production history (APH) credit program to address the lack of production histories for beginning farmers or those who have added land or rotated crops;

--It creates a multi-year disaster APH adjustment for producers who have suffered a natural disaster during at least three of the preceding five years, resulting in an APH reduction of 25%. Qualifying producers can exclude one year of APH for every five years of experience;

--It allows producers to plant a substitute crop on prevented planting acres when specific conditions are met;

--It mandates a program to develop a new rating system to address lower risk producers not currently using crop insurance;

--It provides an incentive for producers to undertake additional risk management activities;

--It takes steps to improve the coverage available under the non-insured assistance program;

--It creates a pilot project to study the feasibility of expanding crop insurance to livestock;

--It creates a pilot project to study the feasibility of offering gross revenue coverage for specialty crops;

--It creates a pilot project to study alternative coverages for producers who seldom suffer crop losses;

--It creates a pilot project to study the feasibility of allowing approved insurance providers to offer coverage that is reinsured through hog and cattle futures markets;

--It creates a pilot project to study the feasibility of allowing policies for specialty crops, uninsured commodities and livestock that are based on whole farm revenue;

--It creates an options pilot project for hog and cattle producers.

In addition, the bill addresses the need for economics and reinsurance expertise for Federal Crop Insurance Commission board members; addresses certain regulatory and structural issues at the Risk Management Agency and within USDA and provides for fines up to $10,000 per violation of compliance agreements by insurance agents, loss adjusters and approved insurance providers.