[Congressional Record Volume 152, Number 102 (Friday, July 28, 2006)]
[Extensions of Remarks]
[Page E1599]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          INTRODUCTION OF H.R. 5932: FARM RISK MANAGEMENT ACT

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                           HON. TERRY EVERETT

                               of alabama

                    in the house of representatives

                         Friday, July 28, 2006

  Mr. EVERETT. Mr. Speaker, I introduced legislation yesterday, along 
with my Alabama colleagues Representatives Jo Bonner and Mike Rogers, 
to enable America's farmers to better manage the risk to their 
livelihoods in times of severe weather and skyrocketing energy costs. 
The Farm Risk Management Act (FARM Act) would create risk management 
accounts, using both USDA and individual farmer contributions, to 
reduce the financial impact of disasters on the agriculture community. 
The FARM Act would allow farmers to insure their income by creating a 
whole-farm risk management program based on total revenues from all 
their farming activities. This is a departure from the current crop 
insurance program, which provides coverage based on a specific 
commodity. The new risk management account goes beyond the scope of 
current crop insurance by allowing farmers to withdraw funds from their 
accounts to help offset any unforeseen farm expense including high 
energy or fertilizer costs. With my new proposal, a farmer would 
deposit money into the new risk management account. The U.S. Department 
of Agriculture would then match the farmer's contribution in this tax-
deferred, interest bearing account, rather than subsidizing a portion 
of the crop insurance premium for the farmer as is done presently. As a 
result, farmers would effectively be self insured.
  More and more, we are seeing farmers lose their farms due to the 
unfortunate combination of increasingly harsh weather, rising 
operational costs and a Federal crop insurance program that is too 
expensive to help many cover their losses. Recent Farm Bill hearings 
and subsequent meetings I have had with farmers in the Southeast have 
led me to the conclusion that current crop insurance programs are not 
working. The present system is too expensive, leaving many farmers 
exposed to uncontrollable risks. It also allows room for fraud which 
only serves to drive up program costs for everyone.
  There is an urgent need for significant crop insurance reform that 
will offer hardworking farmers the tools they need to manage the unique 
risks involved in agricultural production. With the upcoming Farm Bill 
reauthorization, we have a chance to address this critical issue, and I 
am offering this legislation to advance debate. This approach of 
individual risk management accounts could address many of the problems 
associated with the current crop insurance system and save the Federal 
Government money by alleviating the future need for ad hoc disaster 
assistance. Most importantly, it will give farmers struggling against 
natural forces beyond their control greater flexibility to make a 
living while performing the vital task of putting food on America's 
table.

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