Farm Bill Panel Recommends Exploring Crop-Insurance Choices

By Josie Musico, Lubbock Avalanche-Journal, Texas
McClatchy-Tribune Information Services

March 21--Crop insurance replaces direct payments in the new farm bill, but few would claim it's that simple.

But Larry Combest, former chairman of the U.S. House of Representatives agriculture committee, said during the 2014 Farm Bill Informational Session on Thursday, March 20, that simple isn't necessarily better.

"While this thing is extremely complicated, complications provide opportunities," he said.

A half-dozen other speakers updated producers in the meeting, which was a joint effort by the Southwest Council of Agribusiness, Texas A&M AgriLife Extension Service and A&M's Agricultural and Food Policy Center.

Joe Outlaw, director of the Agricultural and Food Policy Center, noted that in the new bill's insurance program, producers will only be compensated if less-than-ideal crop yields justify it.

"(Direct payments) are gone, and I don't see us going back to them anytime soon," he said. "The farm bill is a true safety net. There has to be a problem for the safety net to kick in."

The speakers suggested producers consider all their options for the types of insurance plans.

"We worked hard on this farm bill to give you some choices," said U.S. Rep. Randy Neugebauer, R-Lubbock. "You can tailor those choices to your particular option."

Two main options are price-loss coverage and agriculture-risk coverage, according to the presentation. Agriculture-risk coverage is further divided by county and individual plans.

Outlaw said county ARC plans are based on combined data from more farms than individual ARC.

"It's using county yields to set that benchmark," he said.

Noting the farm bill's five-year life span, Outlaw also recommended producers consider their long-term goals when selecting an insurance plan.

"If you make this decision based on getting a payment one year, you're going to get what you deserve," he said. "This is a five-year bill."

Bart Fischer, a spokesman for the House agriculture committee, said producers may vary by commodity their agriculture-risk coverage and county ARC, but not individual ARC.

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"It's crop by crop and farm by farm," he said. "You can mix and match however you want."

And unfortunately for the South Plains, neither plan covers cotton.

"If they didn't offer you a transitional payment, you would have no coverage," Outlaw said.

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