CongressDaily / October 29, 1999 / By Jerry Hagstrom
Senate Agriculture Chairman Lugar Thursday rejected an offer from Sens. Pat Roberts, R-Kan., and Bob Kerrey, D-Neb., and other supporters of the Roberts-Kerrey crop insurance reform bill to reach a compromise with Lugar on his risk management proposals so that a crop insurance/risk management bill could move forward, according to congressional aides.
The details of the Roberts-Kerrey offer could not be determined. But staffers for members supporting the Roberts-Kerrey bill had earlier developed an offer limiting the risk management pilot to $500 million, according to documents obtained by CongressDaily.
A Lugar spokesman said the $500 million offer "would be insufficient" and that there was "no way" Lugar would accept it.
The FY2000 congressional budget resolution set aside $6 billion for additional spending on crop insurance over four years beginning in 2001.
A spokesman said Lugar had earlier offered a 13-state pilot, which would give farmers an option of getting direct payments they could use for a variety of risk management activities rather than just crop insurance, but had trimmed it to eight states after Kerrey and Roberts rejected that offer.
The spokesman also said Lugar's plan was bolstered by a study released by the Food and Agricultural Policy Research Institute at the University of Missouri and Iowa State University this week showing that farm income in 43 states would rise more under the Lugar approach than the Roberts-Kerrey approach.
The only states that would definitely do worse under Lugar's plan, the spokesman said, are Texas and North Dakota.
But other Senate aides criticized the FAPRI study as flawed.
They said it did not take into consideration the full administrative costs of the Lugar approach or the value of crop insurance coverage in reassuring bankers and in making a payout in case of crop failure.
The states to be included in the pilot project have not been determined completely, the Lugar spokesman said, but would likely include those states whose senators have shown an interest in risk management: Indiana, Vermont, Mississippi, Arkansas, Illinois and Kentucky.
A Senate agriculture staffer said that, even if agreement is reached on the risk management pilot project and the bill passes the Senate, there are still many issues to be resolved on changes in the crop insurance program.
The Clinton administration has endorsed parts of the House- passed bill. But Agriculture Undersecretary for Farm and Foreign Agricultural Services Gus Schumacher said late Thursday that Agriculture Secretary Glickman had written House Agriculture Chairman Combest on July 27, noting the administration's objections to a provision in the House bill changing the structure of the Federal Crop Insurance Corp. board, which oversees the risk management program.
Glickman wrote: "The bill restructures the FCIC board of directors to allow part time nongovernment officials to chair the board and increases the nongovernment majority. Given the large amounts of federal financial subsidy in the crop insurance program, it is critical that the board be given its ability to commit federal dollars, [and] continue to be governed by a USDA official, currently the undersecretary for farm and foreign agricultural services.":
