June 22

Senate Agriculture Committee Chairman Richard Lugar (R-IN) hopes to have a risk management bill ready for introduction next week. Aides said the cost of the legislation is expected to total $6 billion for fiscal 2000-2002.

Lugar's bill, while emphasizing crop insurance, offers a carrot and stick approach to risk management: to get payments in addition to their transition payments under the 1996 farm law, farmers would have to use at least two of eight risk management practices outlined in the legislation. Most of the eight options focus on the use of futures, options and other marketing tools. Each year they participate in the program, farmers would have to show USDA the two options they've chosen to earn the additional payment.

Of the $6 billion in additional costs, $4.4 billion of it would be spent on one option, said Andy Morton, Lugar aide. That option calls for a farmer to buy federal or private crop insurance equivalent to at least catastrophic risk protection for each federally insurable crop on the farm.

The bill also would provide a premium discount of 35% for buy-up federal crop insurance in 2000-2002 for producers of insurable crops not enrolled in the 1996 farm law's transition payment program. That probably would apply mostly to fruit and vegetable producers, Morton said.