[Congressional Record (Bound Edition), Volume 152 (2006), Part 12]
[Extensions of Remarks]
[Pages 16544-16545]
[From the U.S. Government Publishing Office, www.gpo.gov]




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

                                 ______
                                 

                           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

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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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