Agricultural News
Lucas Concerned Crop Insurance Rule Could Have Unintended Consequences
Fri, 11 Oct 2013 15:36:37 CDT
The full House of Representatives adopted a motion by Agriculture Committee Chairman Frank Lucas Friday to go to a joint House-Senate conference committee over their respective versions of the farm bill.
Speaker of the House John Boehner appeared ready to appoint conferees and the House Rules Committee began drafting rules to guide House conference members.
Lucas appeared before the committee Friday afternoon to discuss the ramifications of an instruction dealing with crop insurance. The instruction directs House conferees to agree to a Senate measure cutting crop insurance premiums for operations with an adjusted gross income in excess of $750,000 per year.
Lucas said that such a cut could produce unintended consequences and higher costs for the federal government. Large producers who are targeted by the cuts could elect to go without crop insurance which would reduce the size of the risk pool. In the event of a disaster, that would mean the remaining policy holders would shoulder a larger portion of the costs.
"I have concerns about language, on the one hand, that would restrict participation in the program because that shrinks the pool and runs the risk of impacting what the costs will be later and how efficient the programs will be."
"I would tell you that if the farm bill is about raising food, about making sure we have enough to eat and enough fiber, then the resources should go to the people who raise the food and fiber, who deliver that product. Picking winners and losers among who should be participating, stepping away from the concept of encouraging production and taking a perspective of deciding who gets to be involved in farming, I have a little problem with that, too. But the main issue is how you impact the insurance pool."
Lucas went on to explain a provision of the Senate Bill that would allow for the subsidy cap to be eliminated or modified if it appeared it would be detrimental to the program and asked Rules Committee members to give the conferees as much leeway as possible to negotiate an equitable arrangement with the Senate.
Some analysts think crop insurance rates could rise as much as 40 percent for operations with AGIs above $750,000.
Any roll call votes on the rules for conferees in the House will take place on Saturday.
You can listen to more of Chairman Lucas's testimony before the committee by clicking on the LISTEN BAR below.
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