Willis: Future crop insurance need ‘unique’ approaches
The issues farmers and policymakers hope crop insurance can address in the future will be more difficult than in the past and may require “unique” approaches, a former Agriculture Department Risk Management Agency administrator said at a House Agriculture General Farm Commodities and Risk Management Subcommittee hearing titled “How Farm Policy Helps Farmers in Adverse Conditions.”
“Insurance is at the stage where there is little ‘low hanging fruit’ left to insure,” Brandon Willis, an RMA administrator in the Obama administration, said as a panel of a farmer, farm credit and crop insurance industry officials testified on the extraordinary problems that farmers are facing this year due to hurricanes, flooding and loss of export sales due to trade conflicts.
Crop insurance has grown to cover more and more crops but “addressing areas with unprotected risks requires a thorough understanding of both insurance and the crops impacted, relationships with impacted growers and grower groups, and finally, a willingness to think outside the box to develop new insurance options. It will take unique insurance approaches and a diligent focus,” said Willis, who is now a private consultant and assistant professor in the College of Agriculture and Applied Sciences at Utah State University in Logan.
Willis said he was pleased that following the devastating losses from hurricanes in Florida and the Southeast in 2017, the 2018 farm bill included a provision that required an effort to develop a policy or endorsement specifically for hurricanes and tropical storms.
“If an effective policy like that had existed at the time, the costly ad hoc assistance provided for 2017 losses might have been avoided,” Willis said.
But he added, “If Congress wants RMA to create options to address uncovered risk, I believe a relatively small investment will be necessary as the appropriations process has not kept pace with Congress’ expectation for continued expansion of crop insurance. If Congress wants insurance to replace ad hoc disaster, we need to develop the insurance products now to address future disasters. A small investment, with clear direction, and an expectation that results will follow will lead to improved insurance products.”
Willis said during the hearing that in the past RMA has “taken a policy off the shelf and applied it to another crop” but that may not work in dealing with the problems that farmers and Congress want addressed in the future.
Several southern members of the subcommittee said a crop insurance program should be developed for timber and asked the panel how to go about it. Ruth Gerdes, a crop insurance agent from Nebraska, said she knew nothing about the timber industry but that the subcommittee and RMA should start by talking with local producers to figure out what might work.
“Success with any policy starts at the grass roots,” Gerdes said.
As the committee discussed the aid that farmers have needed to face both natural disasters and trade problems, Filemon Vela, D-Texas, the subcommittee chairman, said, “If there is a silver lining to this economic storm, it is that there’s never been a clearer need for programs like these that help to keep our farm families in operation.”
But Rep. Glenn Thompson, R-Pa., the ranking member on the subcommittee, said, “While the farm bill is designed to help level the playing field, it’s not designed to handle targeted retaliation by a centrally planned foreign government. As a result, I appreciate that the administration stepped in to help our producers, and I look forward to the second round of Market Facilitation Program assistance being provided as soon as possible.”
Both Gerdes and Leo Ettleman, a farmer from Sidney, Iowa, testified that some of the problems came from the way the Missouri River is being managed.
“I think it is important to ask what we must do to manage risk for the farmer, companies or Uncle Sam when there are holes in the levees. Although levee repairs are not within the jurisdiction of the Agriculture Committee, their repair is critical because weaknesses only expose farmers, companies and the government to risk,” Gerdes said.
Ettleman said that Congress should “ensure that flood control is the dominant function of the Missouri River.”
Vela told reporters after the hearing that he would consult with the House Transportation and Infrastructure Committee about the Army Corps of Engineers’ management of the Missouri River. ❖