North Dakota Sen. Kent Conrad, Montana Sen. Max Baucus and North Dakota Sen. John Hoeven have unveiled the “Revenue Loss Assistance and Crop Insurance Enhancement Act of 2012,” bipartisan legislation that reduces farm program complexity and duplication, strengthens the federal crop insurance program, permanently extends livestock disaster assistance, and serves as a major component of a new farm bill.
"This legislation achieves my two main goals in a new farm bill -- it maintains a strong safety net for producers while, at the same time, contributing to deficit reduction," said Conrad. "This proposal complements crop insurance, is much easier to administer than current farm programs, and gives our family farmers the support and flexibility they need to succeed."
“I’ve spent a lot of time over the last year traveling around Montana and talking to producers about what’s important to them -- things like the Livestock Disaster Assistance program we created in 2008 and a fair plan to chip in on deficit reduction while still making sure our farmers and ranchers are protected from volatile markets and weather,” Baucus said. “This bill is written with the direct input of the farmers and ranchers out there getting dirt under their nails every day to keep food on our tables, and I look forward to working with our colleagues to roll these priorities into a larger farm bill we can all be proud to support.”
“This is bipartisan legislation that provides a cost-effective safety net for our farmers with enhanced crop insurance,” Hoeven said. “It will serve our producers well and at the same time help with deficit reduction.”
The legislation creates the Revenue Loss Assistance Program (RLAP), an initiative that combines Supplemental Agricultural Disaster Assistance (SURE) and Average Crop Revenue Election (ACRE) into one simpler and more effective program. RLAP works in conjunction with crop insurance to provide farmers with assistance for losses between 12 and 25 percent of their average historic revenue. An eligible loss can be due to any combination of decreased yields, declining prices or quality discounts. RLAP is based on individual farm performance, rather than an area trigger, and assistance is provided on a commodity specific basis.
RLAP is designed to address two of the primary shortcomings of the federal crop insurance: program deductibles that greatly exceed the operating margins for a crop and the lack of adequate coverage during multi-year price declines.
RLAP provides assistance for farmers who suffered losses on acres planted for harvest at a 65 percent payment rate. For acreage that was unable to be planted due to adverse weather, the payment rate is 45 percent. Total acreage covered under RLAP for a producer will not be able to exceed that producer’s total base acres.
The legislation also establishes a Supplemental Coverage Option (SCO), along with other improvements to crop insurance. SCO will allow producers to obtain area-wide federal crop insurance coverage in addition to the individual coverage they currently purchase.
In addition, the new legislation extends the SURE Programs for crops for the 2012 crop year with a modification to expedite crop revenue loss payments by about one year.
The new legislation also permanently extends the three livestock disaster programs and the Tree Assistance Program authorized in the 2008 farm bill.
Finally, the legislation continues, with minor modifications, the current commodity marketing loan program and counter-cyclical program while ending the direct payment and Average Crop Revenue Election programs beginning with the 2013 crop.