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Agricultural News

Southwest Council of Agribusiness President Testifies in Support of Crop Insurance, Price Protection

Mon, 23 Apr 2012 17:55:32 CDT

Southwest Council of Agribusiness President Testifies in Support of Crop Insurance, Price Protection
Dee Vaughan, president of the Southwest Council of Agribusiness, testified at the House Agriculture Committee field hearing in Dodge City last week. His organization is composed of 17 farm groups including crop and livestock producers, 30 lending institutions, and 70 main street businesses in Texas, New Mexico, Oklahoma, Colorado and Kansas.

In his testimony, Vaughan urged Congress to protect the crop insurance program and consider price protection. He said this approach would take into consideration more than just producers in a farm bill.

"Farm policy is not just for producers. It is about lenders. It's about main street businesses. It's about communities."

To take into account the needs of all of these groups, Vaughan said, "We need price protection in the farm bill. We certainly support options for different producers, for different regions of the country. We commend the chairman of the House Ag Committee for working on a consensus bill last fall. They did that. They provided for the necessary safety net for all producers for all crops, for all regions of the country. We just want a good farm bill for everyone. For us, it's price protections."

Vaughan emphasized it is very important to focus on the farm bill as a consensus. He said cooperation will do more to preserve the farm economy than competition between farm groups. He said the lack of cooperation will make a good farm bill that much more difficult for Congress to craft.

"It's disheartening, because at a time when agriculture is the shining example of our economy right now, it's the one thing that's hitting on all eight cylinders and moving forward, and the reason for that is that we've had stable farm policy for many years in the United States. And here we are. We need to be getting all the groups together to work on this next farm bill and extend that stable farm policy for five years and we have groups out here that are drawing lines in the sand and saying, 'It's got to be this way or no way.' And we need to be coming together and compromising and agreeing to offer choices to producers around the different parts of the country."

He agreed with producers from all over the country that testified to the effectiveness of crop insurance and making certain it plays a prominent role in the new farm bill.

"The crop insurance program is working very well regardless of where the Senate and House have had ag committee hearings. Producers have said, 'Do no harm to the crop insurance program.' In 2011 we had the historic drought there in Texas, where I live. And if it hadn't been for crop insurance, we wouldn't have made it through it. It's the only thing that's kept a lot of 'For Sale' signs from being out in front of farms today."

He said he supported the current model of public-private crop insurance that has worked well even a GAO study has proposed capping premium subsidies to larger farmers. Vaughan said that approach would be problematic in the Southern Plains.

"Farms in our area, because of the efficiency of scale necessary, we would have substantial portions of our farms we just wouldn't be able to insure. You can't borrow money to grow a crop if you can't insure it.

"If you look at it from a total cost, most producers would not be able to afford crop insurance. And so you get back into that situation of which is the cheapest route to go. Is it better to provide crop insurance or do ad hoc disaster bills when agriculture has major disasters like the flooding in the Missouri River last year and the historic drought in Texas. We had producers who didn't harvest a single thing in Texas last year. They couldn't have afforded to buy insurance, on a yearly basis anyway, if they had to bear the whole cost. So it's a great public-private partnership which allows the federal government to maintain agricultural support but at a reasonable price."

Beyond that, Vaughan's organization would like to see some program of farm price protection in the new farm bill. He said he knows the spectre of direct payments go down hard with the tax-paying public but that historically, the actual amount that would be paid out could be quite minimal if the robust farm economy continues.

You can hear Ron Hays and Stewart Doan of Agri-Pulse Stewart Doan interview Dee Vaughan by clicking on the LISTEN BAR below.

You can read Vaughan's full testimony including details of his proposal for price supports by clicking here.

You can also hear Vaughan's answer to questions from Chairman Lucas about his views on the shallow-loss program.



Stewart Vaughan talks to Ron Hays and Stewart Doan about the 2012 Farm Bill.
right-click to download mp3


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