The NCGA, which was conspicuous in its absence last week from a letter signed by 34 ag organizations supporting the Senate disaster assistance amendment, said it believes Congress should follow a more “common sense approach” when it comes to crop insurance and disaster legislation.
While details of the new program were not released, it appeared the Companion Disaster Assistance Program would provide more assistance to farmers with severe losses, while eliminating some duplication of benefits.
“As you know all too well, severe drought conditions and floods have taken a serious toll on farmers and ranchers during the past two years,” said NCGA President Tim Hume. “Despite significant improvements made to the federal crop insurance program and farm safety net programs, economic losses caused by these natural disasters will require additional assistance to allow producers the opportunity to rebuild their operations.
“The supplemental market assistance provided to row crop producers by the Congress in recent years has been extremely helpful,” said Hume. “However, five years of depressed commodity prices and an overall weak economy have deteriorated the financial resources of many producers who have operated within the slimmest of margins.”
The letter noted NCGA recognizes the federal crop insurance program as the primary risk management tool for producers and urged continued efforts to build upon the sizable increase in producer participation and purchases of higher levels of coverage that have resulted from the Agriculture Risk Protection Act of 2000.
“Given the importance of crop insurance to U.S. production agriculture, NCGA urges changes that allow for a more common sense approach as rules are updated and innovative risk management products are introduced to increase coverage for actual losses.”
Hume said NCGA is also urging Congress move forward quickly and adopt disaster assistance legislation ensuring timely, adequate aid to those who have suffered significant crop losses.
“NCGA believes that reforms of the Crop Disaster Program (CDP) are needed to recognize individual producer's investments in crop insurance policies and to avoid duplication of federal benefits,” he said. “Without changes, the CDP will continue to provide assistance on crops that were insurable with subsidized insurance contracts and target disproportionate levels of disaster payments to low yields that could have been covered by federal crop insurance.
“The fact is growers can still experience a 35 percent crop loss, be impacted by substantial financial losses and see little, if any, payments from their crop insurance policy or the Crop Disaster Program.”
Hume said NCGA is proposing an alternative approach to crop disaster assistance; one that would complement the federal crop insurance program rather than duplicate the insurance coverage under the current Crop Disaster Program.
“NCGA’s Companion Disaster Assistance Program (CDAP) would provide more equitable payments to a predetermined percentage of the insurance deductible loss that is not insured, said Hume. “Rather than targeting payments for low yields that could be covered with crop insurance, CDAP would provide greater assistance to crop insurance participants impacted by crop losses as high as 60 percent.
“Moreover, CDAP would ensure that a producer’s disaster payments and indemnity payments do not exceed a crop's expected value.”
Because of the limited time remaining before adjournment, Hume said NCGA “stands ready to work with you and your colleagues to expedite consideration and passage of a more effective and equitable crop disaster assistance program. We appreciate the exceptional work of this Congress on behalf of U.S. agriculture and want to again offer our support for legislation to assist producers who will suffer significant financial losses as a result of severe weather conditions.”
The letter was sent to Sens. Tom Harkin, D-Iowa, chairman and Richard Lugar, R-Ind., ranking minority member of the Senate Committee on Agriculture, and to Reps. Larry Combest, R-Texas, and Charlie Stenholm, D-Texas, ranking minority member, House Committee on Agriculture.