NCGA Refines 2007 Farm Bill Proposal (3-8-07)

Backed by its Corn Congress delegates, the National Corn Growers Association (NCGA) will ask Congress to adopt its 2007 Commodity Title proposal, the National Farm Security Act (NFSA). This sweeping proposal would create a farm safety net that provides for a county revenue countercyclical program (RCCP) integrated with the current federal crop insurance program.

The RCCP is modeled after the Group Risk Income Protection policy. It would replace the current target price-triggered counter cyclical program and be based on planted acres, rather than base acres. Producers would receive payments when their actual county revenue (per acre) falls below the county’s expected revenue (per acre). NCGA President Ken McCauley said this program is designed to give corn growers the help they need when it is needed.

Under NCGA’s proposal, integration of the RCCP with federal crop insurance will reduce market and area production risk allowing insurance companies to offer higher levels of individual farm level coverage at a lower cost. To prevent duplicate payments for market risk, there will be times the RCCP payments will reduce a producer’s indemnity payments. NCGA’s integrated program will require a re-rating of the revenue insurance contract during the implementation period.

McCauley said corn growers like the 2002 farm bill, but it was not designed for the dynamic happenings in the industry today, and can’t meet growers’ long-term risk management needs.

“This proposal is designed to be more market sensitive – something beneficial for commodity producers and the U.S. taxpayer,” said McCauley

NCGA has been developing its proposal for more than a year, he added. “We have listened to feedback from our growers, other commodity groups, economists and congressional offices. We felt it important to make some changes to the safety net that would better protect producers against rising costs of production, volatile markets and especially crop losses”

One key advantage of integrating federal crop insurance coverage, McCauley noted, will be significantly lower rates for the products available to producers. That’s due to the fact that the RCCP would remove systemic market risk from private insurance companies. 

“We are recommending an ambitious Commodity Title proposal because corn growers believe the time has come for fundamental change in farm programs,” said McCauley.

NCGA Corn Board members will be talking farm programs and budget when they meet next week in Washington, D.C., with congressional leaders and staff. McCauley will present NCGA’s proposal in depth during a Farm Foundation event next week.

To listen to audio by NCGA President Ken McCauley on the farm bill, please click here.