In Wake of Hurricanes, NCGA Cites Need for Long-Term Disaster
Solutions (9-20-04)
In the wake of three hurricanes that have wreaked havoc on farms
and ranches throughout the Southeast, National Corn Growers Association
(NCGA) leaders today urged legislators to act on crop disaster
assistance proposals developed by NCGA and introduced in the U.S.
House of Representatives in 2003. The call for action came as legislation
to fund homeland security appropriations for hurricane victims
was amended to include payments to farmers and ranchers who suffered
weather related losses in either 2003 or 2004.
“In the last days of this Congress, there will be legislation
to deal with the catastrophic losses due to the three hurricanes
that struck Florida and the Gulf Coast. We certainly believe farmers
in those areas need help,” said NCGA First Vice President
Leon Corzine.
“It’s unfortunate Congress only wants to deal with
these kinds of problems in election years,” Corzine said. “We
have offered common sense solutions developed by farmers to take
care of problems facing farmers. Had Congress passed the bill we
helped develop, farmers facing losses would have had more predictable
and sensible risk management protection available to them that
would have offered real and timely help.”
Corzine said
crop insurance works for producers even in years when all geographical
locations
are experiencing crop production
shortfalls. NCGA’s crop disaster assistance proposal was
developed by the Public Policy Action Team (PPAT) in response to
concerns raised by growers facing several years of crop losses
that could not be adequately covered by current crop insurance
products.
“The team recognized that growers needed to have something
in place to cover these losses. We worked with Dr. Art Barnaby
of Kansas State and we talked to a lot of growers. What we came
up with is something that will work in the real world,” said
Ron Litterer, chair of the PPAT.
The legislation, known as the Companion Disaster Assistance Program
Act (CDAP), was introduced by Rep. Sam Graves (R-Mo.) and would
provide a more effective means of delivering disaster assistance
to producers who suffer significant yield losses and multiple-year
shallow losses. The reforms offered in CDAP would strengthen efforts
to encourage producers to purchase higher levels of federally subsidized
crop insurance.
Today, insured growers who have been hit with crop losses of 35
to 40 percent receive minimal to no payments under the traditional
disaster aid program that was designed before the crop insurance
program reforms and new counter cyclical payment program. Worse,
their net insurance payments will be small or none at all, Litterer
said.
CDAP legislation would compliment the crop insurance program by
covering a portion of the uninsurable deductible, rather than duplicating
the insurance coverage purchased by producers. If adopted, the
measure would provide levels of assistance more proportionate to
the degree of losses. Disaster aid can also be delivered more promptly
because most growers who collect indemnity payments would be eligible
to secure a CDAP payment.
In addition to promoting immediate disaster aid reforms, NCGA
has pushed for Congress and the Risk Management Agency to accelerate
the development of a supplemental crop insurance product. The supplemental
product would better protect producers from consecutive years of
shallow losses and declining average production history (APH) that
reduces future guarantees and increases premium rates.
The PPAT has been actively engaged in a cooperative effort with
4B Agriculture Consultants and Science Applications International
Corporation in the submission of a proposal for further product
design, research and development. A national survey of 800 corn
growers released earlier this year by NCGA confirmed that crop
insurance is the most important risk management tool for farmers,
but suggested that more equitable policy premiums and new products
for consecutive losses and catastrophic coverage are needed to
increase participation.
Conference negotiations on homeland security begin this week,
and it is expected that Congress will approve the emergency funding
for hurricane damages and the losses to agriculture.
Litterer noted
although this legislation is a “must pass” bill
for both the presidential race and several key congressional races,
there are greater underlying concerns from the agriculture community.
He said farmers would prefer a long-term solution for the crop
insurance program, as opposed to impulsive reactions from Congress.
“We understand this is important legislation,” Litterer
said. “However, what concerns us is that we offered a solution
to help farmers several years ago and here we are with another
disaster bill and no solution to the underlying problem. If Congress
can pass this disaster bill in two weeks, why is legislation that
works for farmers and taxpayers still not done after two years?”