Leahy: Vermont Dairy ProducersAnd Specialty Farmers Win New Stake In Risk Management Program . . . House and Senate poised to pass bill today

May 25, 2000

WASHINGTON (Thurs., May 25) -- Risk management and crop insurance bills are crucial to Midwestern farmers, but typically they do not matter much to Vermont and the other New England states. Until this year.

Sen. Patrick Leahy (D-Vt.), a leading conferee on a legislative package to overhaul the crop insurance program and to provide emergency farm assistance, worked with other New England and Mid-Atlantic senators on and off the Agriculture Committee to add provisions that will direct millions of dollars to those regions by making the 5-year, $8.2 billion risk management and crop insurance programs more useful to dairy producers, apple growers and other specialty crop farmers than ever before. The bill also will make it easier for dairy and specialty farmers to convert to organic farming to serve that growing market. The emergency farm aid provisions of the bill, totaling an additional $7.1 billion, will steer added help to New England and Mid-Atlantic farmers still struggling to recover from last year's drought. The package will bring hundreds of millions of dollars to farmers in these regions. "This is a landmark bill for Vermont and New England," said Leahy. "It will help reduce precarious risk for Vermont's dairy producers and apple growers by opening the door to risk management options or crop insurance. Our conservation provisions will protect farmland and reduce sprawl, and the environmental aid in this bill will help farmers make improvements that will tangibly benefit our environment."

On Wednesday the conferees finished nearly three months of negotiations on the package – the major agriculture bill for the year – and both the House and the Senate are expected to pass it today. Leahy said the President will sign it. Leahy and others also are working on key dairy and apple provisions for the separate FY2001 Agriculture Appropriations Bill, expected to reach the Senate floor in June. The Vermont senator, who also is the Democratic leader of the Senate Judiciary Committee, helped fight off last-minute efforts last night by some Republican leaders to add to the crop insurance bill unrelated legislation on bankruptcy reform, which would have threatened passage of the agriculture package.

The final crop insurance portion of the bill provides earmarks of around $100 million (over the first 5 years) for New England and Mid-Atlantic states plus additional assistance in the form of enhanced crop insurance coverage and additional protection and benefits for non-insured crops. In addition, New England and Mid-Atlantic states will benefit from a risk management provision which should mostly be used in these areas ($25 million over five years). Other details from the final bill:

CROP INSURANCE REFORM: Senator Leahy was able to target several provisions to the interests of New England and Mid-Atlantic states in this portion of the bill --

1. $50 million (over 5 years) is provided for states like Vermont with histories of low participation in crop insurance to address concerns such as the need for federal dollars to:
   
   
   • assist dairy, and other, farmers in the transition to organic farming;
   • help pay for the cost of stream bank repairs and reconstruction;
   • plant trees for windbreaks and water improvement;
   • construct or improve watershed management structures;
   • use integrated pest management tools; or,
   • employ other conservation or risk management techniques.
   
   
   
2. $25 million for research and development of new crop insurance policies geared to specialty crops and new risk management approaches will benefit New England and Mid-Atlantic states. The $25 million allocated will be provided over the first 5 years for these research and development purposes.
   
   
3. $25 million in targeted education and outreach efforts designed to increase crop insurance participation in states, such as the Northeast and Mid-Atlantic states, which have been under served by traditional crop insurance policies. This $25 million will be available for the first 5 years. (4) $25 million for a national risk management education and outreach program to be run by land grant colleges and the extension service will also benefit the Northeast and Mid-Atlantic regions relatively more than other areas. While this program is not limited to low-participation states, it is expected that in areas where crop insurance participation is high that interest in risk management would be low. This $25 million will be provided over the first 5 years. In addition to these specific funds, Leahy and his allies also added special provisions to allow dairy farmers to: purchase commodity puts (with 80 percent of the cost paid by USDA) to protect against price drops; sell milk in the futures markets to lock in higher prices; or to engage in other subsidized hedging techniques.