The House Agriculture Committee held a field hearing on Friday in Dodge City, Kansas where three GOP Members heard testimony from two panels of agricultural producers.
The ten witnesses addressed a variety of issues, but two overriding themes dominated their testimony: The strong desire to keep conservation compliance requirements and payment limitation regulations separate from crop insurance, as well as concerns regarding revenue insurance and price guarantee policy variables that are currently part of discussions associated with Title I of the Farm Bill.
Gary Harshburger from Dodge City, Kansas testified that, “Please keep crop insurance tools purchased by the producer protected from environmental compliance requirements or other payment limit conditions that do not belong tied to insurance.”
Kansas producer Keith Miller indicated that, “Simply put, during the development of the 2012 Farm Bill, crop insurance must be a priority…[A]s you’re well aware, recent cuts to crop insurance and the renegotiation of the SRA [Standard Reinsurance Agreement] have resulted in $12 to $20 billion in savings. Additional cuts will likely result in increased premiums to producers or reductions in the products available or the level of service companies are able to provide. We simply cannot afford additional cuts in today’s high risk marketplace.”
Mr. Miller added that, “In addition, in no case should the crop insurance tools, which are purchased by the producer, be encumbered with environmental regulation, conservation requirements, or other conditions that fall out of the scope of insurance. They should also not be subject to payment limits or means testing, doing so would defeat the purpose of the programs and reduce their effectiveness in ensuring that producers, no matter how small or large have equal access to risk management tools and an equal opportunity to continue to operate their farms.”
Scott Neufeld, a farmer from Oklahoma pointed out that, “I also strongly oppose applying payment limitations and means testing to Crop Insurance. The agricultural economy has driven many producers to become larger to spread risk and investment in equipment. A farmer producing crops on 1,000 acres of cropland has to have adequate capital invested to efficiently farm these acres. A partnership or family corporation that has gone together and is producing crops on 10,000 acres has the same risk per acre as the smaller producer. Why would we penalize the larger producer by restricting the amount of protection they would be allowed? We need to change our mindset to a per acre basis, not a per operator basis.
“As producers already enrolled in the Farm Bill, conservation compliance is already a requirement to participate so I cannot see the need to entangle Crop Insurance with existing requirements and I urge Members of Congress to oppose this effort.”
And Texas farmer Dee Vaughan added that, “I want to add my voice to the chorus and say, whatever you do, please do nothing to harm crop insurance. Proposals to link conservation compliance and to impose a pay limit on crop insurance are thinly veiled attempts to kill insurance for farmers. Period.”
Additionally, producers on Friday expressed some concern about Title I revenue proposals versus price protection policy ideas.
Oklahoma producer Scott Neufeld expressed concern about revenue programs in his opening statement at Friday’s hearing. Mr. Neufeld walked Committee members through some recent history regarding fluctuating wheat prices and noted that, “All the revenue program ideas floating around out there will not provide the kind of protection farmers need if the depressed prices we just talked about remain in place for several years.”
Mr. Neufeld added, “So, I call on Congress to focus the Farm Bill on providing real price protection for farmers in these periods of prolonged low prices. Fortunately, thanks to the Chairman and the work of his Committee, the 2011 package to the Select Committee [or Super Committee] would have met this basic test.”
Related audio from Mr. Neufeld available here, (MP3- 1:28).
Also, Chairman Lucas engaged in a colloquy with Texas farmer Dee Vaughan during the “Q and A” portion of Friday’s hearing. Specifically, Chairman Lucas inquired about a recent letter from several farm groups that was sent earlier this week to the Leaders of the Senate Agriculture Committee.
A news release yesterday regarding this letter from the American Soybean Association stated that, “The groups do not, however, support program alternatives that tie current-year production to fixed price supports, which can distort planting decisions and production between commodities when market prices decline.”
Chairman Lucas asked Mr. Vaughan to comment on the issue of price protection, a portion of this discussion can be heard here (MP3- 3:04). Mr. Vaughan disagreed with the statement in the letter regarding the lack of support for a price-based protective system.
Meanwhile, Rep. Mike Conaway (R., Tex.), the Chairman of the General Farm Commodities and Risk Management Subcommittee, asked Mr. Vaughan about the recent GAO report regarding crop insurance (As DTN Ag Policy Editor Chris Clayton reported last week, “The GAO, Congress’ investigative arm for examining government spending, stated a $40,000 cap on premium subsidies would have saved taxpayers $1 billion last year and as much as $358 million in 2010.”) To listen to this discussion, just click here (MP3- 1:20).
And also at Friday’s hearing, Rep. Tim Huelskamp (R., Kans.) asked Nebraska farmer Zach Hunnicutt, about proposed Department of Labor regulations regarding child labor limitations on the farm- related audio here (MP3- 1:30).