[Congressional Record Volume 145, Number 35 (Friday, March 5, 1999)]
[Senate]
[Pages S2377-S2378]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         ADDITIONAL STATEMENTS

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                CROP INSURANCE FOR THE 21ST CENTURY ACT

 Mr. BURNS. Mr. President I rise today as one of the proud 
cosponsors of S. 529, Crop Insurance for the 21st Century Act. This 
issue has been at the forefront of reform for American agriculture this 
session.
  The language offered today will bring about much-needed changes in 
the area

[[Page S2378]]

of risk management for farmers and ranchers. Maintaining an effective 
farm income safety net is paramount to the survival of agriculture. I 
believe an effective crop insurance program will provide farmers and 
ranchers greater possibilities for economic sustainability in the 
future and help them out of the current financial crisis.
  A truly effective crop insurance plan involves simply three things: 
private insurance, the federal government and the farmer or rancher. 
The federal government can help facilitate a program to unite the 
producer and the private insurance company. Privatization with 
government intervention will ultimately put the control in the hands of 
the agricultural producer. With a risk management plan, bankers are 
also more likely to finance producers if they have both their commodity 
and their price covered, with a reliable insurance program.
  This bill will render relief to the inadequacies of the current 
program. All agricultural producers are painfully aware of the problems 
with the current crop insurance program. Unaffordable premiums are the 
primary stumbling block for producers. In years of depressed market 
prices, crop insurance, though badly needed, is simply unaffordable for 
farmers and ranchers. Other problems prevalent in the current program 
are inequalities in rating structure and the issue of unfair coverage 
given to multiple year disasters.
  This bill inverts the current subsidy formula, in order to provide 
the highest levels of subsidies to producers at the highest levels of 
buy-up coverage, and thus alleviate the unaffordable premiums. It also 
allows for the revenue policies to be fully subsidized.
  This bill also removes the exclusion for livestock in the current 
crop insurance program. For Montana, which derived $991 million from 
livestock sales in 1996-97 this exclusion is extremely important. Of 
course, the choice will remain up to the livestock producer whether 
they wish to purchase a policy. It is important however, that they are 
given the option. With several years of depressed market prices, 
livestock producers can no longer remain in business without 
assistance.
  This bill will also ultimately put more control in the hands of 
active producers. It restructures the Federal Crop Insurance board of 
directors to include two active producers; one in crop insurance, and 
one in reinsurance. The board would also include the Under Secretary 
for Farm and Foreign Agricultural Services, the Under Secretary for 
Rural Development and the Chief Economist of USDA. In addition, it 
mandates that the Board Chairperson be one of the non-governmental 
members. These are important steps to ensure that the new program is 
run for the producers by the producers.
  A larger step towards private enterprise is the initiation of a 
flexible subsidy pilot program for the private sector to compete on 
rates and delivery expenses. I believe this will ultimately put the 
accountability factor on the companies carrying the policies. Much like 
auto insurance, health or medical insurance, companies will be forced 
to compete for agricultural producers business, in effect lowering 
premiums further.
  This bill is an important tool to reform the current crop insurance 
program into a risk management program, designed to help the producer 
in the long-term. It is vital to find a solution to provide a way for 
farmers and ranchers to stay in agriculture. They must be able to 
continue to produce and distribute the world's safest food supply at a 
profitable margin.
  Mr. President, I look forward to working with Senators Roberts and 
Kerrey on this important piece of legislation. I will have some 
amendments forthcoming, that I believe will make this bill even more 
effective. I believe this bill will pave the way for massive crop 
insurance reform and help producers out of this economic 
crisis.

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