Insurance News

Crop Insurance Critical to Kansas Agriculture

Posted on: September 8, 2011

Kansas farmers and rural leaders told the U.S. Senate committee drafting the new Farm Bill that the federal crop insurance program is critical to Kansas agriculture.

Their testimony came during a field hearing in Wichita by the U.S. Senate Committee on Agriculture, Nutrition and Forestry as it grapples with recommendations for budget cuts amid a devastating drought across much of the nation’s Midwest. Farmers in western Kansas are struggling with extreme drought, while farmers in eastern Kansas are trying to cope with flooding.

“Without a safety net my operation and many others would no longer exist,” said David Schemm, a wheat grower from Sharon Springs in western Kansas.

Schemm said that the crop insurance program has been vital to his operation, noting that when he goes in to see the banker for an operating loan the bank wants to know his crop insurance level.

The ag committee’s chairwoman, Democratic Sen. Debbie Stabenow of Michigan, said the panel has until Oct. 14 to give the budget-cutting “super committee” its recommendations for farm program cuts.

While the deficit reduction agreement didn’t make any immediate cuts to farm programs, agriculture remains a target as the super committee finalizes their plan to reduce the federal budget by $1.2 trillion or more, she said.

Stabenow told about 300 people who attended the field hearing in Kansas that she considers the farm bill a jobs bill because 16 million people work in agriculture.

“Agriculture has already taken substantial, and in my judgment, disproportionate cuts,” Stabenow said.

The ranking member of the agriculture committee, Republican Sen. Pat Roberts of Kansas, said agriculture faces tough challenges ahead as global population is expected to top 9 billion in the coming decades. He said in order to meet this demand, agriculture must double output.

“Some folks question the need for a Farm Bill with commodity prices where they are today,” Roberts said. “I don’t have to tell this crowd that prices can fall much more quickly than they rise.”

Roberts told reporters before the hearing that “everything is on the table” when it comes to farm programs, but that farmers and ranchers want them to use common sense in making program cuts.

The Kansas senator said he wants the budget cutting super-committee to give them a number of farm program cuts, but leave it up to the agriculture committee to decide how to best make those farm program cuts.

“Farmers will understand fiscal responsibility and we simply ask that cuts to farm programs be proportionate to other programs,” said Kenneth McCauley, a corn grower from White Cloud and past president of the Kansas Corn Growers Association.

Kansas Farm Bureau President Steve Baccus testified farmers need a strong safety net that includes crop insurance as well as direct payments. He urged the committee not to increase crop insurance premiums for producers.

“We cannot afford this kind of weakening in the safety net,” Baccus said.

Gregory Shelor, a sorghum grower from Minneola, acknowledged that it has been hard to justify in the past direct payments to farmers when they have good crops and good prices. But he said crop insurance doesn’t cover all expenses whereby direct payments cover more during dry years.

Direct payments, which pay producers for crops whether they have had a good year or a poor year, is not as effective for the taxpayer, said Jeff Whitham, chairman of Western State Bank in Garden City.

“From our perspective, the most effective is multi-peril crop insurance,” he said.

Ron Brown, president of the Kansas Association of Conservation Districts in Fort Scott, urged the committee keep funding for conservation at or above current levels in the new farm bill. He said programs can be consolidated to improve efficiency and provide easier access for producers.

Kansas Gov. Sam Brownback focused his remarks to the committee on the future of the dwindling Ogallala aquifer, saying a multi-state approach to the problem accompanied by appropriate federal policy would be useful.

The governor urged inclusion of a conservation program in the Farm Bill that would provide federal incentive payments to water right holders in exchange for retiring all or part of their water right. He also urged the adoption of so-called limited irrigated crop insurance that would protect farmers who apply reduced water to fields. Typically, crops are insured as ether fully irrigated or dryland fields.

Kansas is among three states, in addition to Colorado and Nebraska, which has been given tentative approval to develop and offer limited irrigated crop insurance possibly as soon as next year if certain milestones can be met, Brownback said.

Copyright 2011 Associated Press. All rights reserved.

%d bloggers like this: