House Agriculture Committee Chairman Frank Lucas, R-Okla., and Subcommittee on General Farm Commodities and Risk Management Chairman Mike Conaway, R-Texas, initiated the first of several farm bill program audits to educate members about the statute's many provisions and provide a snapshot of program costs. Conaway presided at the hearing, which examined the federal crop insurance program, administered by the U.S. Department of Agriculture's (USDA) Risk Management Agency (RMA).
RMA administrator William J. Murphy -- the only hearing witness -- testified for USDA.
Rep. Rick Crawford, R-Ark., asked Murphy for a comparison of the insurance participation rates for rice and other commodities, which the administrator said he would send to Crawford after the hearing. Murphy told Crawford that it has been "great meeting with rice growers," about downed rice concerns, something RMA is examining.
Murphy was happy to report to Crawford that RMA is seeing increases in rice insurance sign-ups and that the agency is working actively to improve the program for rice producers. He also told Rep. Jean Schmidt, R-Ohio, that Southern rice growers are concerned about hurricane and crop disease risks.
Murphy testified that crop insurance industry estimates "suggest 2011 program liability could exceed $100 billion," up from less than $14 billion in 1994. Over the past two decades, premiums have been sufficient to cover indemnities paid to producers and maintain a reasonable reserve fund, which federal law requires, Murphy said.
USA Rice Federation's Crop Insurance Task Force is leading the industry -- including working with USDA on product development -- in an attempt to design crop insurance options that are more responsive to rice farming's key productions risks.