Wednesday, June 27, 2012

Neugebauer's crop insurance plan a controversial part of proposed 2012 farm bill

WASHINGTON — Abilene's congressman wants to strengthen the safety net for farmers for a price tag of $3 billion during 10 years while lawmakers widely agree it's time to ditch controversial direct payments.
Rep. Randy Neugebauer, a self-avowed fiscal conservative, proposes expanding a different program — crop insurance. That part of the safety net already costs an estimated $9 billion a year.
Neugebauer's proposal is in the Senate's version of the 2012 farm bill. Neugebauer will have a front row seat in shaping the House version since he's on the House Agriculture Committee.
Every five years, federal lawmakers write a farm bill to set policy for agriculture, initiatives to feed the poor and other programs.
The Republican from Lubbock, who said he isn't a farmer, has received modest agriculture subsidies through a land development endeavor. He's got plenty of company in the 19th Congressional District. The farming and ranching district was No. 1 statewide in the amount of farm support payments that producers received over 15 years.
Direct payments are a hot-button issue because they send taxpayer dollars to growers, regardless of need and whether they grow anything or not.
The Senate farm bill cuts $23 billion while spending $1 trillion over 10 years, including about $800 billion on nutrition programs. The legislation also signals a change toward relying on new government-subsidized crop insurance programs, such as Neugebauer's, to protect farmers from losses.
"A lot of the new aspects of the farm bill were really built around the principle that I introduced in the previous farm bill," he said.
Neugebauer is working on his second farm bill and floated a measure to create the Supplemental Coverage Option last time to expand the safety net for farmers.
"What it's about is allowing them to increase the amount of coverage … on their crops," he said.
Many producers can only afford to insure 50 percent or 60 percent of their crop, but the cost of fuel and fertilizer keeps going up, Neugebauer said. So, famers need to increase coverage.
Big Country Rep. Mike Conaway, also an ag committe member, supports Neugebauer's proposal.
Environmental Working Group has long criticized farm subsidies, such as crop insurance.
"On average, for just the regular old crop insurance, taxpayers pick up 62 percent of the premium," said Craig Cox, EWG senior vice president for agriculture and natural resources.
For the Supplemental Coverage Option, taxpayers will pick up 80 percent, Cox said.
While doing away with the direct payments program saves $5 billion a year, the Senate farm bill plowed 75 percent of the savings back into a mix of new safety-net programs, such as Neugebauer's, Cox said.
Senators also cut conservation programs by $6.5 billion and food stamps by more than $4 billion over 10 years.
Neugebauer said cost estimates from the Congressional Budget Office — such as the $3 billion for his Supplemental Coverage Option — were for the Senate bill.
"The House version will be a little bit different," he said.
Senators also cut other farm support programs, Neugebauer said.
"The change in the farm policy actually will probably end up saving as much or more than any changes to the food stamp program," he said.
Neugebauer said farmers and ranchers are willing to see programs benefitting them cut, but they're asking to take a proportionate share of the cuts — not all of them.
From 1995 to 2010, the 19th Congressional District's share of farm subsidies was $6.2 billion, according to the EWG's farm subsidy database. The statewide total was $24.4 billion.
Almost $1 billion of money flowing to the 19th Congressional District were direct payments, raising the question of what happens to local farmers and crops if the program disappears.
Texas Farm Bureau President Kenneth Dierschke said direct payments have helped producers get through rough times, and they will feel the pinch if the program goes away.
"But, hopefully, a lot of those dollars will be transferred over into another crop insurance program," said Dierschke, a San Angelo area farmers. "I think that may possibly work out better for us as far as a safety net.
"I know sometimes it sounds like we're asking for a handout, but we're not. Most of the people are just looking for some protection to keep in business."
Dierschke received $437,638 in farm support payments from 1995 through 2010, according to the EWG's database.
Texas' two senators, both Republicans, parted ways over the farm bill.
Sen. Kay Bailey Hutchison voted for the bill, approved 64-35 in the Senate on June 21.
"The legislation will help Texas farmers and ranchers begin planning for the next five years," Hutchison said in a statement.
It's not perfect but passed with a bipartisan majority, setting the stage for the House and Senate to come together to work on a final bill before the current farm bill expires at the end of September, she said.
Sen. John Cornyn voted against the Senate farm bill, saying it was a flawed piece of legislation.
"I could not support a measure that would have swallowed nearly 80 percent of the farm bill budget with increased food stamp funding and failed to make the tough decisions this fiscal climate demands," Cornyn said in a statement.
House lawmakers are set to begin work on their version of the farm bill July 11.


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