The complexity of risk management programs needs to be simplified and streamlined to effectively support the farmers and ranchers they serve, according to Vincent Smith, professor of economics at Montana State University, who spoke during the Jan. 19 “Risk Management” session held during the Agricultural Outlook Forum in Arlington, Virginia.
Speaking in front of fellow panelists Jonathan Coppess, USDA Farm Service Agency administrator and William Murphy, USDA Risk Management Agency administrator, Smith said in 2001 farmers received payments from CCC through 80 different programs. “Things have become more complicated with the advent of countercyclical payments in 2002,” he said. “The Iowa corn-soybean farmer [for example] has 150,000 farm-wide insurance options to choose from on top of FSA commodity programs ACRE and DCP.”
Coppess, who gave an overview of the risk management programs offered by the Farm Service Agency, stated that more than $137 million has been paid out in 2009 through the Livestock Forage Program and 67.1 in the Livestock Forage Program. “Nationally, eight percent of 32.5 acres of farmland have been enrolled in the ACRE program,” said Coppess. Corn was the largest crop in the program with 13 million acres followed by wheat with 9 million.
FSA is currently looking into how to provide more help for farmers and ranchers. “We are working to find how to make for a bigger safety net. We need to evaluate what farmers need to do individually on the farm and what government needs to do.”
Crop insurance is a large part of managing risk for farmers and recently the Risk Management Agency
renegotiated its agreement with crop insurers. According to Murphy, the renegotiation objectives will support producer access to insurance, provide a reasonable rate of return and enhance the program’s integrity.
“I think we offered a pretty reasonable offer even on our second draft,” said Murphy.
