Crop Insurance

Floor Speech

CROP INSURANCE -- (Senate - August 02, 2007)

Mr. GRASSLEY. Mr. President, my comments here today are to point out the importance of the crop insurance program to America's farmers and America's rural communities.

Congress enacted legislation in 1980 that allowed for the expansion of the program and the involvement of the private insurance sector in the crop insurance program's delivery. Since this time, the program has grown from a small, experimental program to one that insures over 70 percent of the eligible acres in the country. In many States, an even higher percentage of the eligible acres in the State are insured. In my home State of Iowa we have over 90 percent enrollment. This protection has come to be relied on by farmers and their lenders as a vital and necessary part of farming. For most farmers their crop insurance policy is the basis of their risk management, crop marketing and loan collateral.

The success of the crop insurance program can be attributed to two key items. One is the support of the Federal Government. It is no secret that the Government supports the crop insurance program with premium subsidies that encourage farmers to purchase coverage and help pay for its cost. Additionally, rather than further increasing farmers' premium costs, the Government also pays for the delivery of the program. These Government expenditures, while not insignificant, are considerably less than the Government would likely spend in after-the-fact disaster aid if farmers didn't use the program or if the program didn't exist.

The second key item that has contributed to the success of the crop insurance program is the delivery of the program by the private insurance sector. Delivery of the crop insurance program by private companies, using local insurance agents, using modern technology, and with an incentive to do things right and earn underwriting rewards, has allowed for market penetration that was thought impossible by many. But it has occurred, and it continues due to the quality, timely and accurate service being provided to farmers by local agents and companies.

I point out the importance of this program and its successes today, because this body is expected to consider this program during debate of the farm bill. It appears that despite successfully operating under separate legislation for years, the crop insurance program is being pulled into the farm bill discussions. The House farm bill has pulled money from the crop insurance program to offset other spending. I intend to analyze carefully the impact this House action will have on farmer's ability to manage their own risk. While I recognize there are improvements that need to be made to the program, crop insurance brings more stability to rural America.

American farmers deserve a safety net that they can count on each and every crop year. As the Senate prepares to work on our farm bill provisions, I hope we recognize that crop insurance has become ingrained into the fiber of American agriculture, from the farmers and lenders that depend on it to the rural communities whose local economies are bolstered by it in hard times.

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