Home Indiana Agriculture News Farm Groups in Opposition to Crop Insurance Means Testing

Farm Groups in Opposition to Crop Insurance Means Testing


Farm Bill heatA large coalition of agricultural groups – including the American Farm Bureau Federation, American Soybean Association, National Corn Growers Association, National Farmers Union and The Fertilizer Institute – have asked House leaders to oppose any adjusted gross income means testing provisions for the federal crop insurance program. In a letter to House Speaker John Boehner and Minority Leader Nancy Pelosi – the groups note the critical role crop insurance plays in the survival of farms and ranches. While the Senate-passed farm bill included AGI means testing – attempts to cut crop insurance protection were defeated during floor consideration of the 2013 farm bill in the House. In anticipation of a means testing proposal from Wisconsin Representative Paul Ryan – the groups wrote that they are now disappointed to face yet another attack on crop insurance in the form of a Sense of the House. The groups oppose the resolution and urge Boehner and Pelosi to oppose resolutions that undermine strong crop insurance protection.

According to the letter – the crop insurance program is actuarially sound and requires a broad pool of participants to function properly. Arbitrarily assigning a means test for support – the groups wrote – would reduce program participation – resulting in a higher risk pool of insured producers, higher loss ratios over time and increased premium rates for those remaining in the program. The groups say limiting crop insurance protection would also yield the unintended consequence of increased calls for ad hoc, off-budget disaster assistance. In addition – the letter states that a barrier to crop insurance participation through a means test is counter to the goal of provisions to strengthen, improve and expand crop insurance. The groups add that means testing unfairly discriminates against full-time and diversified farms – as well as those producing fruits and vegetables and other high-value crops.

The letter to Boehner and Pelosi states that insurance products offered through federal crop insurance are key to food security. Without the risk protection provided by federal crop insurance – the groups say agricultural lenders would be forced to increase underwriting standards, increase costs to offset risk and reduce credit availability in some areas of the county.


Source: NAFB News Service