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March 16, 2016

House and Senate Agriculture Appropriations Committee Chairs and Ranking Members:

As the Appropriations Committees consider annual spending bills, 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 an 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 Appropriations Committees develop their spending proposals for the year, we respectfully urge you to protect crop insurance and in doing so, the financial stability of much of rural America.


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

cc: All members of the House and Senate Appropriations Committees

Crop Insurance and Reinsurance Bureau | 440 First Street NW | Suite 500 | Washington | DC | 20001