U.S. farm programs are once again under scrutiny as Congress gears up to determine what to do with the 2007 farm bill. The new chair of the House Committee on Agriculture, Collin Peterson from Minnesota, has added a new dimension to the discussion with his call for adoption of a standing disaster payment program as a permanent part of the farm bill. His proposal expands this year’s farm bill debate because consideration of the merits of a standing disaster program will inevitably draw in a discussion about what to do with the crop insurance program. After all, as former USDA under secretary J.B. Penn pointed out in 2006 testimony before the House Subcommittee on Agriculture, “One of the overarching goals of the crop insurance program has been the reduction or elimination of ad hoc disaster assistance.” If Congress moves in the opposite direction and passes a permanent disaster program, then a major policy rationale for a subsidized crop insurance program is called into question.
Babcock, Bruce A. and Paulson, Nicholas D.
"Crop Insurance: Inside or Outside the Farm Bill?,"
Iowa Ag Review: Vol. 13
, Article 1.
Available at: http://lib.dr.iastate.edu/iowaagreview/vol13/iss1/1