U.S. Senate Approves Legislation to Reform Federal Crop Insurance Program
March 23, 2000

Washington, DC -- The U.S. Senate today overwhelmingly approved legislation to reform the Federal Crop Insurance Program, an action that will benefit farmers in California, where more than 300 crops do not have adequate crop insurance protection.

The legislation, the Risk Management for the 21st Century Act, would increase the share of crop insurance premiums paid by the federal government. The bill seeks to encourage more farmers to buy crop insurance instead of relying on disaster aid. It would authorize $5 billion over 5 years for the premium subsidy, allocate $1 billion for research and development, and pilot programs. The bill now goes to conference with the House, which passed its version (HR 2559) last September.

The following is Senator Feinstein’s statement on the legislation:

“This legislation will provide a much greater level of protection to growers of specialty and minor crops than what currently exists. California’s specialty crops totaled more than $15 billion in 1997 and represented almost 60% of the total gross income for California agriculture.

The current federal crop insurance program fails to provide adequate or even minimal protection to more than 300 crops grown in California. I believe with the passage of this bill, this unacceptable level of coverage will change. The bill is good for California in the following ways:

• It expands eligibility for specialty crops covered by the Noninsured Assistance Program, which provides disaster payments to speciality crop producers who lose crops. However, this program is considered overly restrictive because at least 35% of a crop must have been destroyed countywide in order for farmers to be eligible. The new bill eliminates the 35% requirement so victims of a localized disaster will be protected even if the disaster does not impact the entire county.

• It promotes the development and use of affordable specialty crop policies by:

(a) requiring that at least 50% of the funds dedicated to research and development for new crop insurance products are focused on specialty crop development;

(b) 50% of these funds are to be spent on outside contractors, giving those with expertise on specialty crops the opportunity to develop policies;

(c) specifically authorizing funds for Risk Management Agency to enter into public and private partnerships to develop specialty crop insurance policies.

• To further encourage development of new policies, the legislation authorizes funds for pilot programs and allows the pilot programs to be conducted on state, regional, and national basis for a period of four years and can be extended if desired by the Risk Management Agency.”