[Congressional Record Volume 153, Number 61 (Tuesday, April 17, 2007)]
[Extensions of Remarks]
[Page E764]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        FARM RISK MANAGEMENT ACT

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                           HON. TERRY EVERETT

                               of alabama

                    in the house of representatives

                        Tuesday, April 17, 2007

  Mr. EVERETT. Madam Speaker, I introduced legislation today, along 
with my Alabama colleagues Reps. Spencer Bachus, Jo Bonner, Bud Cramer, 
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 hard-working farmers the tools they need to manage the 
unique risks involved in agricultural production. 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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