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Crop insurance could replace direct payments under proposed 2012 Farm Bill

HONOLULU—As farmers face huge cuts to farm programs under the proposed 2012 Farm Bill, they will be paying more for crop insurance and receiving fewer direct payments.

“If they do away with direct payments then we need a different crop insurance program,” explained Mary Kay Thatcher, senior director of congressional relations for the American Farm Bureau Federation. Thatcher spoke about the 2012 Farm Bill Jan. 8 during the AFBF’s 2012 Annual Convention.

Voting delegates to the convention set legislative policy relating to the farm bill Jan. 10.

Thatcher encouraged farmers to support the Systemic Risk Reduction Program, which AFBF proposed to Congress as an alternative to existing shallow-loss proposals. SRRP is considered a “deep loss” program for farmers who face catastrophic crop losses. Under SRRP, the price used to determine when direct payments would kick in would be based on a three-year average, and coverage would likely be in the 70 percent to 80 percent range.

“This creates a real safety net,” said AFBF economist John Anderson, who also spoke about the 2012 Farm Bill. “SRRP formalizes the integration of crop insurance and loss payments.”
Virginia Farm Bureau Federation leaders attending the convention weren’t necessarily sold on the idea.

“It sounds to me like Congress is trying to throw it back on the farmer to insure themselves,” said M.L. Everett, a Southampton County cotton and peanut producer. “Crop insurance is already a very expensive part of my farming operation.”

Gary Cross, a Southampton County cotton, peanut, soybean and wheat grower, was in agreement. “Crop insurance was 8 percent of my operating costs last year,” he said. “They just keep cutting our safety net.”

A 12-member supercommittee was appointed in 2011 to reduce the 2012 Farm Bill budget, which encompasses farm and food programs. The committee received 175,000 comments from the public, Thatcher said.

Before it was disbanded, the committee recommended cutting billions of dollars to farm programs.

The Agriculture Committee offered to cut $19 billion, which was three times the funding allocated for farm programs. Three out of every $4 in the farm bill are for food programs.

“We’re willing to take our fair share of the cuts if everyone else does,” Everett said. “So much of the farm bill is about nutrition programs, so I don’t think we should take three times our share of the cuts.”

Contact Greg Hicks, VFBF communications, at 804-290-1139.

 

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