Ag Policy Blog

CBO Report on Crop Insurance Riles up Industry Convention

Jerry Hagstrom
By  Jerry Hagstrom , DTN Political Correspondent
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PHOENIX — A Congressional Budget Office report on how the federal government could reduce expenditures for crop insurance has angered House Agriculture Committee Chairman Michael Conaway, R-Texas, and led lobbyists to conclude that critics of the federal crop insurance program are better organized than during past farm bill debates.

Speaking at the Crop Insurance Industry Convention Monday, Conaway noted that CBO reports are usually analytical, not prescriptive. Conaway said when he asked a CBO official why a December report, “Options to Reduce the Budgetary Costs of the Federal Crop Insurance Program,” was written in a prescriptive manner, the official said it was at the request of a member. When Conaway asked for the name of the member, the CBO official refused to divulge it.

Conaway said the report has not gotten “a lot of play” but it will probably be discussed more in March when crop insurance critics prepare amendments to bring to the floor of the House.

The report contains ideas that have been promoted by the Heritage Foundation, the American Enterprise Institute, Taxpayers for Common Sense and the Environmental Working Group, which are all critical of the crop insurance program.

Later, as a panel of farm lobbyists discussed the upcoming debate, Zack Clark of the National Farmers Union said that “the angles” that critics will use against crop insurance are not new, but “the opposition seems a lot more organized this time. There are a lot more of them this time around. I am a lot more nervous.”

Clark noted that the CBO report has caught the attention of many congressional aides, and said that means the crop insurance industry and farm lobbyists need to spend time defending the program.

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One of the policy options is to eliminate the Harvest Price Option, which allows farmers to buy policies that use prices at harvest time, which can be higher than anticipated prices when the policies were purchased, to determine losses.

Bev Paul of the American Soybean Association said that almost every soybean farmer maintains a policy that includes harvest price coverage, and that eliminating the Harvest Price Option would cut the crop insurance program by 25%.

“That is not a little tweak,” she said.

Paul Bleiberg of the National Milk Producers Federation and a former Capitol Hill aide, noted there are members who will support the farm bill but will also vote for amendments to cut the size of programs because they like to tell farmers they support the bill but also tell others they vote for amendments to cut spending.

Bleiberg and Robbie Minnich of the National Cotton Council said it is vital that Congress fix the problems in the cotton and dairy programs, either through the farm bill or other legislation.

Josh Tonsager of the National Association of Wheat Growers said that about 100 members of the House have no record of voting on crop insurance and that his group is trying to educate them even when they are not from wheat-growing areas.

Robbie Boone of the Farm Credit Council pointed out that Farm Credit institutions are the largest writers of crop insurance policies in the country in addition to depending on crop insurance to provide stability to its member borrowers.

Kellis Moss of Ducks Unlimited said his members want to maintain the swampbuster rules and the Regional Conservation Partnership Program. Ducks Unlimited’s alliance with USA Rice has been helpful in maintaining duck habitat, he said.

Robert Guenther of the United Fresh Produce Association noted that fruit and vegetable producers seem to have gotten used to the idea that they must comply with federal conservation standards in order to qualify for crop insurance premium subsidies.

He added that the growers would be interested in crop insurance policies that address quarantine and food safety risks.

Guenther noted that what happens with the farm bill, including crop insurance, will also depend on how the White House gets involved. President Donald Trump told the American Farm Bureau Federation recently that he supports crop insurance, but Agriculture Secretary Sonny Perdue has made comments about restricting the program.

Guenther noted that there has been “a lot of back and forth on many issues” from the Trump administration.

Congressional Budget Office, Options to reduce the budgetary costs of the federal crop insurance program https://goo.gl/…

Jerry Hagstrom can be reached at jhagstrom@njdc.com

Follow Jerry Hagstrom on Twitter @hagstromreport

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