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ASA Reinforces Support for Crop Insurance, Opposes Means Testing

May 01, 2013

ASA joined a broad coalition of other farm groups this week in a letter to Senate Agriculture Committee Chair Debbie Stabenow (D-Mich.) and Ranking Member Thad Cochran (R. Miss.) reiterating support for strong crop insurance provisions in a new farm bill, and oppositions to certain provisions that would limit its effectiveness, specifically any form of means testing as a qualification for purchase.

"Agriculture is only beginning to emerge from one of the most significant droughts in our nation’s history. From the fields we hear that crop insurance played a critical role in survival and a key reason that farmers will return to producing food, fiber, feed and fuel this year," wrote the groups. "Limiting crop insurance support to producers of a certain size creates barriers to participation for producers trying to obtain this risk management protection and impacts the financial health of the agricultural community."

"As with other lines of insurance, crop insurance requires a broad pool of participants to function properly," continued the groups. "Arbitrarily assigning a means test for support will impact the pool of participants, both in the near term and longer term… Means testing unfairly discriminates against full-time farms and those producing higher value crops, such as specialty crops."

The groups concluded the letter by highlighting the potential long-range fiscal ramifications of means testing, saying, "Making crop insurance protection unaffordable would cause producers to reduce their program participation, resulting in a higher risk pool of insured producers, higher loss ratios over time and increased premium rates for those that remain in the program. Limiting crop insurance protection would also yield the unintended consequence of increased calls for ad hoc, off-budget disaster assistance, which were not heard during the devastating 2012 crop production year."