USDA has announced a crop insurance and risk management reform plan expected to cost another $2.0-2.5 billion.  It would about double the size of the federal subsidy.  Agriculture Secretary Dan Glickman said the proposal "will make crop insurance more affordable and more worth buying (and) bring new products to market and provide better information and service to growers."

The seven points in the plan include:
     --a 50 percent increase in coverage for catastrophic policies to 60 percent of yield at 70 percent of expected market price;
     --providing larger federal subsidies to make higher level coverage more attractive to farmers;
     --reducing added costs to coverage greater than 70 percent of yield and 100 percent of expected price by half through the federal subsidy;
     --providing a subsidy to all policy types, including revenue coverage;
     --covering multiple year losses;
     --providing new types of risk management coverage;
     --launching a pilot insurance program for livestock producers, not current eligible for a federally supported insurance policy.

The American Farm Bureau Federation says Congress needs to stop "tinkering" with crop insurance and approve legislation to make the system work for all commodities in all regions of the country.  The statement came from AFBF official Terry McClure, an Ohio farmer, before a House ag subcommittee.

McClure said that while 68 percent of eligible acres were covered by crop insurance in 1998, Congress cannot expect that level of participation to continue without program improvements.

"The $6 billion in assistance last fall (from Congress) sent farmers a clear message that purchasing crop insurance in 1999 was unnecessary, because Congress would step in with ad hoc disaster assistance," he said.

He said insurance must be available for all commodities, including livestock.  Reforms must include provisions to address multi-year losses.  Also, he added, there is disincentive for new product development in the current program.

Current law and regulations require that once a company has USDA's approval to market a new product, any competing crop insurance company can market the same product.

An exclusive marketing rights agreement or a cost-reimbursement proposal would help solve the problem and make product development more attractive for insurance companies, said McClure.