Floor Statement of U.S. Senator Chuck Grassley on the Crop Insurance Debate
As everyone involved in agriculture knows, the weather is an unavoidable risk that farmers must deal with every day. The federal crop insurance program was established to protect farmers from unavoidable risks like adverse weather, plant disease, and insect infestations.
Our agriculture community has recently been subjected to more than just unavoidable natural disasters. My neighbors have felt the brunt of a world economic crisis, increased foreign competition and poor trade diplomacy. These factors have led to a significant reduction in farm income. It was necessary for Congress to provide $8.7 billion in additional assistance to farmers last year, but this was only a short-term fix, not a long term solution.
With the farm economy in the tank and the price of multiple commodities hitting twenty-year lows last year, many individuals have decided to lash out against the 1996 farm bill.
I would be the first to admit that government policy was partially responsible for the instability within the agriculture community, but I don't blame the farm bill. I find fault in our ability to pass a substantive crop insurance bill and the Administration's failed efforts to open markets for our agricultural commodities. I hope to remedy one of these shortcomings this morning by providing a long-term solution to the agriculture community through risk management which better mediates the unavoidable risks farmers experience.
This legislation, the Risk Management for the 21st Century Act, will accomplish many of the most important goals requested by my constituency. By adopting this substitute we will increase the affordability of crop insurance, make the program more flexible and responsive to changing demands, improve the public-private partnership, expand opportunities for livestock coverage, and last but certainly not least, equalize subsidies for revenue based products.
What does this mean for Iowa? Eighty-one percent of all corn and soybeans are insured in the state of Iowa. Eighty-five percent of insured acres are covered by buy up policies and 60 percent of insured acres in Iowa are covered by a revenue insurance product. This is the highest percentage in the United States.
By making crop insurance, especially revenue products, more affordable, Iowa farmers will use the improved subsidy formula to benefit from the highest subsidy at the highest level of coverage. The high levels of coverage will help to support family farmers in poor years and alleviate some of the need for what is becoming an annual economic relief payment.
This program won't open new markets abroad for our commodities, but it will stabilize the potential losses my friends and neighbors could experience due to poor exports. This legislation will provide the security necessary to help farmers through lean years so that they will be around to experience better prices and increased revenue in the future.
Mr. President, we have the opportunity today to provide the agricultural community with an important tool to better manage the risks inherent to farming. Improving the crop insurance program and insuring that quality coverage is more affordable and better suited to the needs of farmers will only serve to provide much needed stability in rural America. While we have more to accomplish to guarantee the stability of the family farmer, this is an important first step and I appreciate this opportunity today. Thank you.