[Congressional Record Volume 145, Number 46 (Tuesday, March 23, 1999)]
[House]
[Pages H1538-H1540]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    PROTECTING PRODUCERS WHO APPLIED FOR CROP REVENUE COVERAGE PLUS 
              SUPPLEMENTAL ENDORSEMENT FOR 1999 CROP YEAR

  Mr. COMBEST. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 1212) to protect producers of agricultural commodities who 
applied for a Crop Revenue Coverage PLUS supplemental endorsement for 
the 1999 crop year, as amended.
  The Clerk read as follows:

                               H.R. 1212

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. CROP INSURANCE OPTIONS FOR PRODUCERS WHO APPLIED 
                   FOR CROP REVENUE COVERAGE PLUS.

       (a) Eligible Producers.--This section applies with respect 
     to a producer eligible for insurance under the Federal Crop 
     Insurance Act (7 U.S.C. 1501 et seq.) who applied for the 
     supplemental crop insurance endorsement known as Crop Revenue 
     Coverage PLUS (referred to in this section as ``CRCPLUS'') 
     for the 1999 crop year for a spring-planted agricultural 
     commodity.
       (b) Additional Period for Obtaining or Transferring 
     Coverage.--Notwithstanding the sales closing date for 
     obtaining crop insurance coverage established under section 
     508(f)(2) of the Federal Crop Insurance Act (7 U.S.C. 
     1508(f)(2)) and notwithstanding any other provision of law, 
     the Federal Crop Insurance Corporation shall provide a 14-day 
     period beginning on the date of enactment of this Act, but 
     not to extend beyond April 12, 1999, during which a producer 
     described in subsection (a) may--
       (1) obtain from any approved insurance provider a level of 
     coverage for the agricultural commodity for which the 
     producer applied for the CRCPLUS endorsement that is 
     equivalent to or less than the level of federally reinsured 
     coverage that the producer applied for from the insurance 
     provider that offered the CRCPLUS endorsement; and
       (2) transfer to any approved insurance provider any 
     federally reinsured coverage provided for other agricultural 
     commodities of the producer by the same insurance provider 
     that offered the CRCPLUS endorsement, as determined by the 
     Corporation.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Texas (Mr. Combest) and the gentleman from Texas (Mr. Stenholm) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Texas (Mr. Combest).
  Mr. COMBEST. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise to offer a bill, H.R. 1212, with an amendment. 
This bill's timely passage is critical to thousands of American farmers 
who may otherwise be unable to buy appropriate levels of insurance on 
their 1999 crops. The amendment to the bill is noncontroversial and 
technical in nature.
  Importantly, H.R. 1212, as amended, enjoys bipartisan support in the 
Congress, the administration's backing and does not cost the U.S. 
Treasury any money. I am pleased to be joined by the committee's 
ranking member, the gentleman from Texas (Mr. Stenholm); chairman of 
the Subcommittee on Risk Management, Research, and Specialty Crops, the 
gentleman from Illinois (Mr. Ewing); the gentleman from California (Mr. 
Condit); the gentleman from Arkansas (Mr. Berry); the gentleman from 
Louisiana (Mr. Cooksey); and the gentleman from Louisiana (Mr. John) in 
offering this legislation.
  The facts surrounding the need for this bill are complicated. But, in 
short, unless H.R. 1212 becomes law, thousands of farmers, by no fault 
of their own, will be left with three undesirable choices, staying with 
crop insurance policies that may not be economical for their 
operations, accepting catastrophic crop insurance that provides very 
low coverage, or settling for no crop insurance at all.
  Mr. Speaker, leaving farmers in this predicament is unacceptable. 
That is why I am offering H.R. 1212. H.R. 1212 is straightforward. It 
provides a brief window of time up until April 12, 1999, in which 
farmers who are in this predicament may buy new crop insurance. The 
bill also permits affected farmers to transfer certain policies during 
the same period of time. The bill in no way interferes with private 
contracts.
  While this bill is limited to providing immediate relief from a 
current problem, I want to assure my colleagues that the committee 
expects to thoroughly examine the underlying issues that led to this 
problem as we work to improve the crop insurance program for this year.
  Mr. Speaker, I would ask my colleagues to support H.R. 1212, as 
amended, and urge its timely passage.
  Mr. Speaker, I reserve the balance of my time.

                              {time}  1500

  Mr. STENHOLM. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in strong support for House passage of H.R. 1212. 
I want to commend my colleague from Arkansas (Mr. Berry) for all of the 
work he has done on this legislation. The bill offers a no-cost 
solution to a problem created by the interaction between Federal crop 
insurance and the private insurance industry.
  Mr. Speaker, crop insurance law and regulations provide definitive 
dates for the sale or cancellation of crop insurance policies. The 
deadlines help to protect the taxpayer from costs associated with 
adverse selection. Without firm deadlines, producers could wait until 
the growing season has commenced, make an assessment as to their 
likelihood of harvesting a good crop, and then those who had a good 
crop would decline crop insurance and those likely to have a loss 
purchase it. Sales closing dates help prevent bad insurance outcomes 
and excessive taxpayer cost at the same time.
  Mr. Speaker, this year many producers purchased a Federal crop 
insurance policy known as Crop Revenue Coverage, CRC, based on the 
belief that a related policy known as CRCPlus would be available under 
certain terms. The CRCPlus enhancement policy, while it modifies a 
producer's insurance coverage, is not approved, not backed and not 
regulated by the Federal Government.
  Mr. Speaker, after the Federal deadline for sale or cancellation for 
the Federal CRC policy passed in many areas, the company offering 
CRCPlus made an announcement that the terms of the policy would be 
changed from what many producers had applied for. Since some producers 
purchased their Federal CRC policies so that they could take advantage 
of CRCPlus, under the initial terms they have ended up with insurance 
outcomes that differ from their intentions.
  Mr. Speaker, the bill before us would allow any producer who had 
applied for a CRCPlus policy to change their coverage under the Federal 
crop insurance program. In order to guard against costs associated with 
adverse selection, the bill provides that a producer may only change to 
a federally-backed policy that provides equivalent or lower coverage. 
In addition, the bill provides a date certain after which these changes 
could no longer be made. With these provisions CBO estimates that the 
bill will not increase program cost.
  Mr. Speaker, this bill provides a fair opportunity for producers to 
make adjustments to changes and circumstances which were beyond their

[[Page H1539]]

control. I thank the chairman of the committee and other Members for 
responding quickly to this situation. Again, I commend the gentleman 
from Arkansas (Mr. Berry) for his efforts, and I urge my colleagues to 
vote for passage of this bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. COMBEST. Mr. Speaker, I yield as much time as he may consume to 
the gentleman from Louisiana (Mr. Cooksey) who is a member of the 
committee.
  Mr. COOKSEY. Mr. Speaker, H.R. 1212 provides a window of opportunity 
for hard-working farmers all over the United States, but particularly 
hard-working farmers that bought CRC Plus insurance, to buy new 
insurance to protect their 1999 crops. Farmers who bought this private 
CRCPlus policy as a supplement to federally-approved policy have been 
harmed because the coverage has been unilaterally reduced or altogether 
rescinded by the insurance company.
  While Louisiana farmers and other farmers harmed in this situation 
can co-opt out of the CRCPlus policy and the Federal policy, the 
Federal policy it supplements, these farmers are left with little to no 
insurance if they do so because the last day to buy insurance has come 
and gone. H.R. 1212 helps Louisiana farmers and other rice farmers who 
are harmed in this ordeal by extending the time period to buy new crop 
insurance so that these farmers can buy the insurance coverage they 
need to protect their investment.
  Mr. STENHOLM. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Arkansas (Mr. Berry).
  Mr. BERRY. Mr. Speaker, I thank the gentleman from Texas (Mr. 
Stenholm) for yielding this time to me, and I thank the chairman of the 
committee, the gentleman from Texas (Mr. Combest) and also the ranking 
member, the gentleman from Texas (Mr. Stenholm) for their swift action 
regarding this matter.
  I rise today because the farmers in the First Congressional District 
of Arkansas and across the country have basically been victims. They 
have been ripped off by the old bait-and-switch of an insurance 
company. We started getting calls about a month ago from farmers in our 
district that had been victims of this problem, and it has spread, Mr. 
Speaker, much beyond the First Congressional District of Arkansas.
  The problems farmers have had with the CRCPlus have gone on far too 
long, and it is time for us to provide a legislated remedy so that they 
can have the necessary insurance that is available to them and give our 
farmers the option to not be victims, and hopefully to keep other 
farmers from being victimized by similar circumstances in the future.
  Mr. Speaker, I urge the passage of the bill, H.R. 1212, Mr. Speaker, 
and I hope my colleagues will support it.
  Mr. COMBEST. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, this is the bill, H.R. 1212, that led to the need to 
bring this up in a very expeditious fashion. As the gentleman from 
Arkansas (Mr. Berry) very well pointed out, it is a dilemma which is 
very unfortunate in that it occurred. One of the in-depth processes 
that the Committee on Agriculture is currently going through is looking 
how we might substantially improve the crop insurance program for 
coming years; failing that, a risk management tool, a very strong, 
adequate, sufficient crop insurance program is something that most 
farmers and farm groups and commodity groups across this country are 
suggesting that needs to take place, that it is currently deficient in 
the pending farm legislation.
  It is somewhat sad, I think, that this has occurred primarily because 
one of the ideals that we are trying to put forward in considering crop 
legislation for the future and a crop proposal for the future and 
reform is to provide the opportunity for there to be some type of 
adequate revenue assurance measure that is an option for farmers in 
which to participate. Those farmers that have contacted the committee 
in the area in which this primarily has occurred, in the southern part 
of the United States, obviously do not currently have a tremendous 
amount of confidence in the program as it has worked there, and while I 
would suspect that future crop insurance programs and reform and 
legislation that would provide an adequate risk management from the 
revenue assurance aspect is something that would be very well accepted, 
I think it would probably be substantially crafted differently than 
this is.
  So, I want to ensure those farmers out there who are in fact 
concerned about the process that, as I had indicated in my opening 
statement, the committee will look very carefully at the process that 
led up to the necessity to pass this bill today in very short order, in 
order to give those farmers an opportunity to make some choices that 
they went into with good faith, however after the end of the game, the 
rules were changed. We want to go back and give them the fourth quarter 
to be able to replay this and to bring into their own business 
decisions whatever works best for them, giving them some options.
  We appreciate the fact that the department does support this concept, 
is willing to work with farmers trying to work through it, and because 
the deadlines that are imposed and the closing dates to purchase crop 
insurance have, in fact, expired, it is necessary to give them that 
option up to, as I mentioned, April 12, as the bill does. We are 
certainly hopeful that in a very expeditious fashion the Senate would 
consider this legislation and get it down to the department or down to 
the President for signature, which has been virtually assured, so that 
this matter could be dealt with this week, prior to the time that the 
Congress leaves for its Easter break, and that these farmers can be 
making these decisions.
  But again I want to emphasize the fact that we will look very 
carefully at the conditions that led up to this particular problem, in 
trying to make for certain that farmers can be assured in the future, 
as this crop insurance program is revised and reformed, that in fact 
this is not a situation which they would have to be concerned about, 
and we will try to do everything we can from our committee to put into 
place all of the safeguards that would be necessary to protect those.
  Mr. Speaker, I reserve the balance of my time.
  Mr. STENHOLM. Mr. Speaker, I yield myself such time as I may consume, 
and continuing in the light of the statement of the gentleman from 
Texas (Mr. Combest), this particular problem that we are solving today 
with this legislation is indicative of some other, even larger problems 
associated with our current crop insurance program. We are finding now 
that there is widespread but not necessarily unanimous agreement that 
crop insurance as it is current constituted, is inadequate to meet the 
needs of our farmers and ranchers around this country, and that is why 
I have been fully supportive of the gentleman from Texas' efforts this 
year to make revenue insurance, crop insurance slash livestock 
insurance, the number one priority of our House Agriculture Committee 
this year, and I think we are finding now that there is substantial 
agreement.
  I was in Crockett County, Tennessee yesterday with one of our 
colleagues, the gentleman from Tennessee (Mr. Tanner), over 300 farmers 
there, in which there was substantial agreement that crop insurance 
needs to be improved. And as we do this, I think it is important for 
our colleagues and all interested in this subject to realize that we 
are basically starting with a blank sheet of paper. We are finding that 
when we talk about crop insurance, that even those crops that have been 
covered, there are holes in the program. We also are finding that 
livestock producers have been left out as far as being even eligible to 
purchase coverage.
  One of the things that we are finding now is that in light of the 
1995-1996 farm bill that basically said to our producers, ``produce for 
the market,'' removal of a lot of government activity regarding 
agricultural production, that there was also a promise that we were 
going to free up world markets. And as we all know now, we have not 
been able to pass Fast Track, we have had all kinds of difficulty in 
even getting the United States negotiators to the table in order to 
free up those markets so that we might produce.
  That has now led us to another situation in which in the past crop 
insurance has been designed to care for weather-related disasters. We 
now are beginning to know that currency

[[Page H1540]]

changes, whole regions of countries, when they have economic problems, 
it has affected our producers in ways in which no one in this body 
anticipated in the 1995-1996 area when we were passing this 
legislation.
  So I use this opportunity today to say that this particular bill and 
the need for this bill today was caused inadvertently by a 
misinterpretation, misapplication of what some believe was current law. 
What we now have, the task for us, ahead of us, is to see that we do 
provide a crop insurance, revenue assurance program that will be 
adequate for our producers, whether they be crop, livestock or anyone 
in between. That is the challenge, and we hope later this year or 
certainly early next year it would be my hope that we would be able to 
bring comprehensive legislation to the floor of the House dealing with 
this particular problem.
  With those comments, Mr. Speaker, I yield such time as he may consume 
to the gentleman from Louisiana (Mr. John).
  Mr. JOHN. Mr. Speaker, I would like to also extend my thanks to the 
ranking member, the gentleman from Texas, and also the chairman of the 
Committee on Agriculture who have brought this measure in an 
expeditious manner to us. This is a very important piece of legislation 
for the district of south Louisiana of which I represent, the rice 
capital of the world.
  This is a situation that has cropped up and that has occurred by no 
fault of any of the producers, where they have acted in good faith to 
try to obtain the kinds of coverage they need, to make sure that they 
are covered for the problems that may incur similar to what happened 
last year. What this bill does, very simply, is open the time in which 
the farmers could actually reapply for some insurance and some other 
federally-covered insurance to protect them in this crop zone, so I 
urge final passage of this piece of legislation that is so important 
and was not brought upon by any of the producers' fault at any point in 
time.
  So I commend the gentleman from Texas for bringing this legislation, 
again, and I urge strong support.
  Mr. Speaker, I rise in strong support for HR 1212. I am a co-sponsor 
of this legislation and I have worked constantly on this problem since 
it surfaced approximately one month ago.
  Mr. Speaker, before discussing the merits of this particular 
legislation, I would like to commend the Chairman and Ranking Minority 
Member on the House Committee on Agriculture, Mr. Combest and Mr. 
Stenholm, for their leadership in ensuring that this issue received the 
prompt attention that it deserves.
  We are here today, Mr. Speaker, because of a recent development 
concerning a private crop insurance policy provided primarily for rice. 
Namely, ``CRCPlus'' is a supplemental insurance product available only 
from America Agrinsurance (AmAg). This policy allowed producers to 
increase their Crop Revenue Coverage (CRC) revenue guarantee to provide 
a higher level of protection against major crop loss or a decline in 
market price. After the sales closing date for federal crop insurance 
policies had passed, AmAg changed the terms of the CRCPlus plan for 
producers that had applied for the supplemental coverage.
  This situation, and the events that followed, has called into 
question the integrity of the Federal crop insurance program. The good 
faith efforts made by farmers to hedge their risk by participating in 
the crop insurance program, combined with the actions of AmAg, placed 
my rice farmers in a bad position--leaving them heavily and 
unnecessarily exposed or having them pay higher premiums for coverage 
they could have received elsewhere. Allowing this situation to proceed 
is the wrong message to send, especially at a time when many of us in 
Congress are attempting to strengthen the crop insurance programs.
  Passage of this legislation will reopen the time period during which 
farmers who applied for CRCPlus insurance may buy additional federal 
crop insurance. This is intended to allow farmers who were affected by 
the decisions of AmAg concerning CRCPlus to adjust their crop insurance 
policies and obtain substitute insurance. Under this measure, these 
farmers would be eligible to buy federal crop insurance from other 
federally-approved insurers, with coverage up to the level of 
protection they would have had under the original CRCPlus policy in 
which they had applied.
  These farmers would also be allowed to transfer to other insurers any 
basic federal crop insurance they have obtained through AmAg for other 
crops.
  Without this legislation, farmers would not only remain heavily 
exposed, but would also be less trustful of crop insurance reform in 
the future. With this in mind, I urge Members to support HR 1212 and 
give the farmers the legislative fix that they need to address their 
risk concerns.
  Mr. COMBEST. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Mississippi (Mr. Pickering).

                              {time}  1515

  Mr. PICKERING. Mr. Speaker, I rise today in support of H.R. 1212, 
offered by my good friend, the chairman of the Committee on 
Agriculture, and I commend him for his leadership on this issue. I also 
want to recognize the ranking member, the gentleman from Texas (Mr. 
Stenholm), as this is a bipartisan effort to address a very critical 
need for our American farmers.
  Today, through no fault of their own, many hard-working Mississippi 
farmers are left with crop insurance that does not meet the needs of 
their farming operations or, even worse, they are left with no crop 
insurance at all. I share the chairman's view that leaving farmers in 
this predicament is unacceptable, and gladly, H.R. 1212 fixes that 
problem.
  H.R. 1212 gives Mississippi farmers, and farmers throughout the 
country who have already been adversely affected by this ordeal, a new 
window of opportunity to buy the insurance coverage they need.
  Mr. Speaker, American farmers borrow more money each year and every 
year than most of us borrow in a lifetime, to plant a crop so that we 
can all enjoy low prices at the grocery store and so that the whole 
world can eat. Each and every year this is an incredible gamble for 
each of the farmers, because markets may not even provide these farmers 
enough to pay back their loans or cover their costs of production. 
Worse yet, the weather could rob them of their crop completely.
  H.R. 1212 offers our Nation's farmers the chance they need to protect 
this huge investment and gives them just a little peace of mind.
  Mr. Speaker, I urge my colleagues to vote for this very timely and 
important piece of legislation.
  I also want to join with my colleagues to say that this is just an 
interim fix, that the long-term crop insurance reform for a 
comprehensive solution is coming, and we need to all work with the same 
type of bipartisan consensus and effort to fix the underlying problem 
of an inadequate crop insurance program. I look forward to working with 
my colleagues on this and the long-term solution in the days to come.
  Mr. MINGE. Mr. Speaker, I rise today in support of H.R. 1212, a bill 
to protect producers of agricultural commodities who apply for Crop 
Revenue Coverage PLUS supplemental endorsement of 1999 crop year.
  This legislation will provide relief to farmers throughout the United 
States, including farmers in Minnesota, who had applied for a specific 
non-federal crop insurance policy whose coverage level changed or was 
expected to change after the sales closing date had passed. Without 
congressional intervention, these farmers would be forced to remain in 
financially detrimental crop insurance policies for the 1999 crop year 
with little possibility for recourse. In the current poor economic 
climate for farmers, it is vitally important that we in Congress do 
everything possible to provide farmers with opportunities to maximize 
their operations' profitability. H.R. 1212 will, at no cost to the 
Federal Government, allow producers to change their crop insurance 
coverage to products which will better serve their needs.
  Given the increased importance of risk management tools under the 
1996 farm bill, I commend the chairman and ranking member of the 
Agriculture Committee for bringing this matter before the House of 
Representatives for a timely resolution.
  Mr. STENHOLM. Mr. Speaker, I yield back the balance of my time.
  Mr. COMBEST. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. LaHood). The question is on the motion 
offered by the gentleman from Texas (Mr. Combest) that the House 
suspend the rules and pass the bill, H.R. 1212, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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