At the first House Agriculture Committee hearing of the year, chairman Mike Conaway told Agriculture Secretary Tom Vilsack, “With commodity markets plummeting and crop producers struggling to find financing, now is precisely the wrong time to weaken crop insurance.” It was the latest rebuff from the farm sector of White House proposals to reduce crop insurance spending by 17 percent through a lower premium subsidy on revenue policies that insure the price at harvest time, and by adjusting payment rates for prevented-planting claims.
Conaway cited a USDA estimate that farm sector income would fall by one-third this year, and said, “The agriculture economy has been turned on its head.” Vilsack said the administration proposals grew out of independent reviews. Conaway said the heavy cost of 2012 drought indemnities and a 2011 revision of USDA’s master agreement with insurers made the sector less attractive. Continued cuts could make coverage less available, he said.
Also during the hearing, Vilsack said 9 percent (or 280,000) of the farmers eligible for USDA crop subsidies have chosen between the two options in the 2014 farm law: Price Loss Coverage and Agricultural Risk Coverage. The deadline to inform the USDA is March 31. He encouraged farmers to make a decision soon, to avoid a last-minute crush.
Vilsack said the USDA will have “an early spring decision process” on whether to call a general signup for the long-term Conservation Reserve, that Canada was “far less willing to negotiate than the Japanese” for the 12-nation Trans-Pacific Partnership trade pact, and that a WTO decision was expected in the spring on U.S. meat-labeling rules. “Either we win the appeal or Congress has to act,” he said.
Vilsack’s prepared statement is available here.