U.S. Capitol

U.S. Capitol

A hearing last week by a subcommittee of the U.S. House Agriculture Committee on the ongoing downturn in the farm economy uncovered some holes in the farm safety net.

While farmers expressed appreciation for improvements in the 2018 Farm Bill and the continuation of crop insurance as well as ad hoc disaster and trade-mitigation assistance, they also pointed out where that support has fallen short.

Producers in Texas had a giant crop in the field, much larger than historical production, when Hurricane Harvey hit in 2017, said Matthew Huie, a Beeville, Texas, farmer.

But crop insurance didn’t interact well with the 2017 Wildfires and Hurricanes Indemnity Program, he said.

If any portion of the crop was harvested, it ruled out crop insurance and the WHIP program, he said.

“So there was no system in place to get any assistance … as evidenced by the fact that it didn’t spend any money,” he said.

WHIP was appropriated $2.6 billion and spent $1 billion, which didn’t go out into the countryside in his part of the world, he said.

Producers in southeast Georgia did receive WHIP payments after Hurricane Irma in 2017, but there were problems, said Bart Davis, a farmer from Doerun, Ga.

The sign-up process was time-consuming, and producers could only get 50% of their eligible payment at sign-up and had to wait until the end of sign-up to get the remainder, he said.

Producers would also like to see program coverage increase from a 70% loss to a 90% loss, he said.

“A lot of people that had losses in 2017 in my area did not qualify, even on my farm,” he said.

Georgia was hit hard again in 2018 by Hurricane Michael, and producers are still waiting for Congress to pass a disaster bill, he said.

Crop insurance didn’t cover the magnitude of losses. The highest coverage most growers can afford is 80% to 85% of their crop, he said.

“So we’re left to incur a significant deductible,” he said.

In addition, crop insurance is based on historical production and didn’t take into account crop potential before the hurricane hit. It also doesn’t take into account continuous improvements in yield and production, he said.

Producers normally carry a 20% risk even at the highest coverage, he said.

The farmers also talked about export losses due to trade disputes and retaliatory tariffs. The administration’s Market Facilitation Program to compensate producers for lost markets is appreciated. But it is based on actual production and wasn’t much, if any, help to those who suffered severe losses due to natural disasters.

The farm bill and federal crop insurance provide a strong foundation for the farm safety net and risk management, but it is clear that supplemental assistance is needed for producers to withstand the current economic pressure, Davis said.

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