[Congressional Record Volume 140, Number 142 (Tuesday, October 4, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: October 4, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
CONCURRING IN THE SENATE AMENDMENT TO H.R. 4217, FEDERAL CROP INSURANCE 
 REFORM AND DEPARTMENT OF AGRICULTURE REORGANIZATION ACT OF 1994, WITH 
                              AN AMENDMENT

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                               speech of

                           HON. LARRY COMBEST

                                of texas

                    in the house of representatives

                        Monday, October 3, 1994

  Mr. COMBEST. Mr. Speaker, today the House takes a giant stride toward 
reforming how the Federal Government responds to weather-related 
disasters that harm American farmers.
  Federal crop insurance for catastrophic weather events will be 
available to all producers who cultivate crops currently insured by the 
Federal Crop Insurance Corporation [FCIC]. In fact, with a few 
exceptions, all producers who receive USDA payments of one form or 
another must insure themselves against a catastrophic disaster. That 
insurance may be purchased through local USDA offices or from local, 
private insurance companies for a $50 processing fee. Producers whose 
crops are not now eligible for coverage from FCIC may receive disaster 
assistance when losses exceed 35 percent on an area-wide basis. This 
will usually be at the county level.
  Producers who traditionally have purchased multi-peril crop insurance 
through private insurance companies still will have those options 
available to them. Premium costs are estimated to be about 17 percent 
lower than the current program. This should give many producers an 
incentive to insure their crops at 65 percent of their actual yields at 
100 percent of the annual price election.
  Mr. Speaker, the portion of this bill dealing with crop insurance is 
substantially the same as the legislation, H.R. 4217, that passed the 
House by voice vote last August 5. The changes it contains are the 
result of our work to incorporate portions of the Senate bill, S. 2095. 
Both bills, H.R. 4217 and S. 2095, worked off the administration's 
original proposal that was designed to stop ad hoc disaster assistance 
and provide a better insurance product. I believe we have succeeded 
under unusual circumstances to reform both the policy of assisting our 
farmers and the process of keeping that assistance within a strict 
budget.

  A key change in law prohibits spending under the budget act by 
excluding agricultural disasters from those emergencies the President 
may declare off budget. This means an end to emergency spending for 
agricultural disasters. Substantial reforms are also included to crack 
down on the abuse that has existed in these programs in the past. You 
may have noticed a story on the front page of today's New York Times 
regarding this abuse. Provisions in H.R. 4217 should eliminate these 
abuses by requiring acreage reports and certification procedures to 
ensure producers are paid only on actual, verifiable losses.
  As I noted in August, the Congress and USDA can no longer afford 
agricultural disaster assistance that has amounted to billions of 
dollars. Following the 1988 drought alone, the Federal Government 
provided more than $7 billion in crop insurance indemnities, disaster 
payments and Farmers Home Administration emergency loans.
  Both agriculture committees of the Congress have worked diligently to 
finish this legislation so that FCIC may implement the program for the 
1995 crop year. That means they must begin now so that producers of 
fall-seeded crops may enroll in the program. It will be a monumental 
task under the best of circumstances, and as the ranking Republican on 
the House subcommittee with legislative and oversight responsibility, I 
certainly pledge my support and assistance to USDA to get this 
important job done.
  In addition to the farmer-assistance program, the bill also requires 
important regulatory reforms designed to reduce paperwork and cut 
delivery costs of private insurance providers. These reforms are 
equally important to the success of multiperil crop insurance since the 
bill substantially alters the current expense reimbursement mechanism. 
The committee needs to make certain these crucial reforms are carried 
out to the fullest extent within the boundaries of program integrity.
  Mr. Speaker, I urge adoption of H.R. 4217.

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