[Congressional Record Volume 145, Number 84 (Tuesday, June 15, 1999)]
[Extensions of Remarks]
[Pages E1267-E1268]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


THE CROP INSURANCE EQUITY ACT OF 1999--COMPANION LEGISLATION TO S. 1108

                                 ______
                                 

                   HON. CHARLES W. ``CHIP'' PICKERING

                             of mississippi

                    in the house of representatives

                         Tuesday, June 15, 1999

  Mr. PICKERING. Mr. Speaker, I am pleased to have the opportunity 
today to introduce companion legislation to S. 1108, the Crop Insurance 
Equity Act of 1999, introduced by Senators Cochran and Lincoln on May 
24, 1999.
  This legislation will effectively function to reform the problems 
farmers across the nation have encountered with the current infeasible 
federal crop insurance program. Participants in the federal crop 
insurance program will find that this legislation benefits farmers 
nationwide, not simply farmers in one region of the country.
  The Crop Insurance Equity Act of 1999 requires that the Federal Crop 
Insurance Corporation re-evaluate current rating methods and processes 
used in rating crop insurance rates by September 30, 2000. In doing 
this, the rates paid by many farmers may be reduced through these new 
procedures. However, if it is found that through this reassessment 
rates would increase for farmers in certain geographic areas, the 
current rating system is to remain in place. In restructuring these 
rates, FCIC will begin its reassessment with those commodities with the 
lowest participation rate of buy-up coverage plans.
  Currently, farmers who buy the highest levels of buy-up coverage 
receive the lowest levels of government premium subsidy. This is a 
direct link to the low percentage of farmers who purchase buy-up 
coverage in my state. The Crop Insurance Equity Act of 1999 will 
equalize all levels of buy-up coverage ensuring that all farmers, no 
matter what level of buy-up coverage they purchase, will receive equal 
assistance from the federal government in their purchase of buy-up 
coverage.
  This legislation will further work to make federal crop insurance 
more appealing by establishing a system of discounts and other policy 
options from which farmers may choose. Farmers who effectively manage 
farm risk through good management practices which reduce the risk of an 
insurable loss will receive

[[Page E1268]]

discounts toward premiums on their insurance coverage. In doing so, the 
federal crop insurance program will work in a manner like other forms 
of insurance. If a driver has a good driving record, he or she should 
justly pay premiums that reflect such. In the same manner, under this 
legislation, farmers who rarely file insurable losses will receive 
premium discounts under the pilot program established by this bill.
  All farmers will benefit from the reform set by the Crop Insurance 
Equity Act of 1999 as this legislation raises the basic coverage level 
for catastrophic coverage, the lowest unit of crop insurance 
protection. Currently, this basic level of protection is completely 
free to the farmer and covers 50% of the grower's average production 
history at 55% of market price. This legislation will increase that 
basic coverage level to 60% of the farmer's average production history 
at 70% of the market price. Doing so will offer am ore feasible safety 
net to the producer should a loss be incurred.
  Mr. Speaker, farmers in my home state of Mississippi assert that one 
of the primary problems faced by the current crop insurance program is 
that it is sometimes abused and exploited by farmers who seek to 
swindle the federal government at the expense of fellow producers. The 
Crop Insurance Equity Act of 1999 will reduce insurance fraud through 
imposing stiffer penalties for anyone, including insurance companies, 
agents, and producers, who participate in fraudulent activities.
  This legislation will also protect new farmers or farmers who rent 
new land or decide to produce new crops by assigning them a fair yield 
until they are able to generate sufficient actual production data. In 
addition, farmers who encounter multiple year disasters will be 
protected by being assigned a yield equal to eighty-five percent of the 
county transition yield for nay year in which the farmer's yield falls 
below that eighty-five percent level.
  The Crop Insurance Equity Act of 1999 reforms the Federal Crop 
Insurance Corporation Board of Directors to include more farmers from 
different regions of the United States and creates an office to work 
with private insurance companies who develop new crop insurance 
products. The legislation goes further by reducing the amount of 
excessive underwriting gains received by these insurance companies.
  Mr. Speaker, our agricultural producers are demanding a more feasible 
and more affordable federal crop insurance program. I believe that this 
crop insurance legislation is a sound and fair proposal which can be 
supported by producers from all regions of the nation.

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