Last week, farm experts from across the country told House Ag lawmakers that crop insurance and other farm safety net programs are working, but the pandemic has shown that some fixes are needed. Farmers needed more than crop insurance and for ARC and PLC to survive the pandemic as well as the trade wars, programs like CFAP, WHIP+ and MFP payments were all needed. Robert Tate a crop insurance agent, told Ag lawmakers as they lay the groundwork for the next Farm Bill, fixes to crop insurance could help farmers better weather uncertainty into the future.
“A farmer has a deductible on the base of his policy. If he has a 75% coverage, he has to lose 25% of his crop before he can collect an indemnity beyond that. The other is a hidden deductible when the APH, the amount that he can insure, based upon past yields, lags behind what they can actually produce.”
University of Illinois, Urbana Ag professor Gary Schnitkey agreed saying crop insurance could be strengthened to reduce the future need for ad hoc disaster payments.
“The justification for the CFAP and MFP programs may have exposed weaknesses to existing title commodity programs. Many commodities, including corn and soybeans, had low prices in recent years, including 2018 and 2019. For example, market year average prices for soybeans in 2018 and 2019, those soybean prices did not trigger PLC payments, and ARC payments were at a relatively modest level.”
Another issue brought up during last week’s meeting, funding of the Commodity Credit Corporation, or the CCC.
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