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Dairy Crisis
I. Risk Management PDF Print E-mail

1. Livestock Producer Assistance
2. Crop Insurance
3. Risk Management Education

We encourage risk management tools be expanded to cover all commodities.

1. Livestock Producer Assistance
NFU supports:

a) The Livestock Compensation Program;
b) Safeguards to assure that program benefits are targeted to family farmers and ranchers;
c) Permanent funding for the Livestock Indemnity Program (LIP); and
d) Deferring the tax consequences of a forced liquidation of livestock if it is due to severe weather conditions or other causes and if the animals are replaced within a 5-year time frame.

2. Crop Insurance
Crop insurance and revenue coverage should not be considered a replacement for fair market prices and an adequate price support program.

We support:

a) The continuation and improvement of the federal crop insurance program;
b) A permanent disaster program, in addition to crop insurance that addresses both catastrophic and shallow losses;
c) Enhancing the affordability of coverage above 75 percent of actual production history (APH);
d) A $75,000-per-individual limitation on the cumulative value of all federal premium subsidies for the purchase of “buy-up” crop insurance coverage. In the event budget cuts result in decreased “buy-up” premium subsidies, those cuts should be accomplished by caps on per-individual subsidies. Crop insurance subsidies should be attributed to individuals based on their share of ownership of insurable production and entities they own;
e) Development of federal crop insurance policies that provide a dollar-per-acre, multi-peril coverage option similar to policies that exist for single-peril hail coverage;
f) Development of federal crop insurance policies based on the regional average cost of production for the insured commodity;
g) Development of new products that allow producers to protect their income in times of low prices and/or quality losses;
h) Expanded production loss and revenue protection programs to cover more crops and livestock in an equitable and comparable manner in all states;
i) Development of products that allow producers to better protect against livestock and livestock feed losses;
j) Directing the Risk Management Agency (RMA) to further develop the Adjusted Gross Revenue (AGR) insurance program;
k) Legislative action to provide the RMA authority to allow nationwide crop and revenue insurance pilot programs;
l) Legislative or administrative action to increase the producer representation on the Federal Crop Insurance Corporation (FCIC) board of directors, clarify the relationship of the RMA to the FCIC, and establish a local appeals process including conflict resolution;
m) Providing family farm producers the opportunity to utilize all available disaster programs without penalty; Farmers relying on surface water for irrigation should not be penalized by being forced to sign up crop as dry-land instead of irrigated land due to an “act of God” resulting in lack of water because of drought;
n) Reasonable funding for crop insurance agent and company reimbursement;
o) Maintaining APH for federal crop insurance purposes when production was reduced by natural disasters;
p) Offering an adequate, individual catastrophic coverage program to provide a safety net against crop disasters with a graduated premium based on acres rather than crops;
q) Signup requirements that contain enough flexibility to allow producers to respond to weather changes;
r) Being eligible to plant a “ghost” crop when a producer collects a payment for a prevented planting;
s) Maintaining eligibility to receive prevented planting indemnity payments regardless of the producer’s planting history;
t) The inclusion of local quality and basis adjustments in revenue assurance (RA) products;
u) The risk management program to recognize and accommodate the unique production and actuarial experience of producers of certified organic commodities;
v) Not reducing established crop insurance during that crop year;
w) The development of an optional, supplemental crop insurance product to expand production loss coverage by helping offset either catastrophic or modest production losses in the event of weather related or other insurable disaster losses;
x) Requiring the RMA and the Farm Service Agency (FSA) to coordinate all definition, reporting requirements and information technologies;
y) The creation of regional advisory committees composed of producers, insurance agents and insurance company officials to work with RMA regional staff and offices to establish appropriate policies, procedures and educational activities for the individual RMA regions;
z) The development and expansion of products that allow producers of non-program commodities, small diversified farming operations of specialty and minor crops to have equitable insurance coverage based on the market for which it is produced;
aa) The concept of a risk management account that would be a private, self-insured policy for farmers that is similar to the current health savings account. This is not a replacement to crop insurance; rather, it is an alternative tool for farmers;
bb) Requiring National Agricultural Statistics Service (NASS) surveys to be sent to the Farm Service Agency (FSA) county offices to distribute evenly throughout the designated counties to better establish a more accurate county average yield;
cc) Preventative planting losses including all weather contingencies, including drought; and
dd) Reinstating the crop insurance payment due date of October 1.

We oppose:

a) The Risk Management Agency allowing outside influence on crop insurance premium levels with regard to specific crop inputs, practices or technologies;
b) The sale of crop insurance by ag lending institutions and other ag industries that are able to coerce the producer, i.e. lenders discounting interest or requiring purchase of the lender’s own crop insurance product as condition of receiving a loan; and
c) The voiding of an entire crop insurance policy due to an error in a single line of the policy.

3. Risk Management Education
We encourage USDA to continue funding risk management education grants.