February 25, 2016

House and Senate Budget Committee Chairs and Ranking Members:

As the Budget Committees develop and consider budget proposals for the year, we respectfully urge you to protect crop insurance and recognize its central importance to farmers, lenders and all of rural America. The 2014 Farm Bill made a multitude of cuts to the farm safety net. However, an overreliance on savings from the agriculture community in the future will greatly undermine rural economies that have faced an estimated 54 percent decline in net farm income from 2013 to 2015. In these challenging economic circumstances, it is Federal crop insurance that will provide lenders the assurances they need to provide capital to America's farmers and ranchers.

The 2014 Farm Bill places greater emphasis on risk management than previous farm bills and in doing so protects the interests of the American taxpayer. Farmers spend approximately $4 billion per year of their own money to purchase insurance from the private sector. Beyond that, on average across the nation, farmers must incur losses of almost 30 percent before their insurance coverage starts to provide assistance.

Crop insurance allows producers to customize their policies to their individual farm and financial needs. Federal crop insurance is based on fundamental market principles, which means high risk areas and high value crops should pay higher premiums for insurance. This emphasis on crop insurance and risk management has replaced constant demand for ad hoc disaster assistance, which is subject to the whim of Washington, and is paid for entirely by the taxpayer, while not being delivered in a timely manner. Meanwhile, the program helps farmers and ranchers facing market conditions greatly impacted by foreign subsidies, tariffs, and non-tariff trade barriers.

All told, the 2014 Farm Bill is a careful balance of priorities and should not be reopened before its expiration in 2018 to achieve additional budget savings. While the Farm Bill comprises just 2 percent of the total Federal budget, and with the entirety of the farm safety net constituting less than one third of one percent of the overall budget, the bill still makes a significant contribution to deficit reduction above and beyond the contributions made through sequestration. In fact, the Congressional Budget Office (CBO) is now projecting that crop insurance will come in $6 billion under budget over the fiscal year 2014-2023 period covered by the 2014 Farm Bill. No other sector of the economy has made similar contributions to deficit reduction, yet many who benefit from the food, fuel, feed and fiber produced in rural America continue to look to agriculture for additional cuts.

Farmers and lawmakers agree that crop insurance is a linchpin of the farm safety net and is crucial to the economic security of rural America. As the Budget Committees develop their budget proposals for the year, we respectfully urge you to protect crop insurance and in doing so, the financial stability of much of rural America.

Sincerely,

American Association of Crop Insurers

American Bankers Association

American Bankers Insurance Association

American Farm Bureau Federation

American Farmland Trust

American Insurance Association

American Malting Barley Association

American Seed Trade Association

American Sesame Growers Association

American Society of Farm Managers and Rural Appraisers

American Soybean Association

American Sugar Alliance

American Sugarbeet Growers Association

Association of Equipment Manufacturers

Association of Fish and Wildlife Agencies

California Association of Winegrape Growers

Corn Refiners Association

Crop Insurance and Reinsurance Bureau

Crop Insurance Professionals Association

Ducks Unlimited

Equipment Dealers Association

Farm Credit Council

Financial Services Roundtable

Florida Fruit and Vegetable Association

Florida Sugar Cane League

Independent Community Bankers of America

National Association of Mutual Insurance Companies

National Association of Professional Insurance Agents

National Association of State Departments of Agriculture

National Association of Wheat Growers

National Barley Growers Association

National Corn Growers Association

National Cotton Council

National Council of Farmer Cooperatives

National Farmers Union

National Grain and Feed Association

National Oilseed Processors Association

National Peach Council

National Potato Council

National Sorghum Producers

National Sunflower Association

National Women Involved in Farm Economics

Pheasants Forever

Quail Forever

Reinsurance Association of America

Rio Grande Valley Sugar Growers

Southern Peanut Farmers Federation

The Independent Insurance Agents & Brokers of America

Theodore Roosevelt Conservation Partnership

U.S. Apple Association

U.S. Beet Sugar Association

U.S. Canola Association

U.S. Dry Bean Council

U.S. Rice Producers Association

U.S.A. Dry Pea & Lentil Council

USA Rice

United Fresh Produce Association

Western Peanut Growers Association