Sinking commodity prices and forecasts of a seven percent drop in farm income are spurring a drive for improved safety nets in the United States.
Crop insurance reform and other programs have been presented to Congress but groups like the National Farmers Union and cattle producer organizations aren’t sure if that is enough.
“We don’t believe crop insurance reform is the solution to the farm crisis,” said Ericka Hovland of the National Farmers Unions based in Washington, D.C.
The farmers’ union wish list from its recent national convention calls on Congress to build a stronger farm safety net to effectively cushion American farmers.
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It wants longer term marketing loans, an extension of the dairy subsidy beyond 2000, risk management programs that provide protection over a number of years and a short-term conservation program to remove land from production during times of surplus.
The proposals for a broader insurance program to cover cattle, hogs and sheep has some livestock groups wincing. Under the U.S. Department of Agriculture rules, livestock is not eligible for crop insurance.
Char Price, of the South Dakota Stockgrowers Association, said his members don’t approve of a program where government helps pay premiums.
“We don’t like the idea because it implies a subsidy,” she said from her ranch at Philip, S.D.
A sister group, the South Dakota Cattlemen’s Association, is willing to look at the concept but has received no details, said Mike Schmidt.
“We have not seen a real hard proposal on how it’s supposed to work. We’re interested and we’re monitoring it,” Schmidt said. A whole-farm revenue insurance would be preferred but no one is sure how to find the right numbers for that either.
Grass insurance
Cattle producers also want to know if forage insurance is on the table. Some people have private insurance on crops like alfalfa but they can’t insure grass.
Legislation to overhaul the federal crop insurance program was introduced March 4. It offers to make crop insurance premiums more affordable by offering government assistance.
For 75 percent coverage, for example, the U.S. government would offer assistance to 55 percent of the premium. It would also create an average production history over a number of years to help those who have suffered a natural disaster in at least three of the last five years.
Forecasts by the USDA suggest net farm income for 1999 will fall to $55.4 billion (U.S.) from 1998 levels of $59.1 billion. Many commodity prices are forecast to stay low and exports may drop to their lowest level in four years.
