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House Ag Panel Probes USDA on Global Warming

posted on May 4, 2007

Founded in the 1930s, the Federal Crop Insurance Program was designed to help farmers recover from the devastating one-two punch of the Dust Bowl and the Great Depression. The program today is administered by the government's Risk Management Agency and is overseen by 16 private-sector insurance companies authorized to sell the policies.

While proponents see Federal Crop Insurance as a valuable risk management tool, critics claim the system has become a "cash cow" for the insurance companies.

Testifying to the House Oversight and Government Reform Committee this week, federal investigators said the private companies earned profits nearly three times those of property and casualty insurance writers over the last five years.

The chair of the oversight panel, democratic Representative Henry Waxman of California, called the program, a "textbook example of waste, fraud and abuse."

The insurance companies counter they must have profitable years to absorb costs during times when claims exceed premiums. And as Congress prepares to write the next Farm Bill, policymakers are concerned about the peril of global warming.

House Ag Panel Probes USDA on Global Warming

This week, crop insurance and disaster aid were key issues for the House Agriculture Subcommittee on General Farm Commodities and Risk Management.

Subcommittee members heard testimony from Risk Management Administrator Eldon Gould and USDA Chief Economist Keith Collins. Key segments of discussion centered on the potential problems global warming could cause for America's producers.

Rep. Nancy Boyda, D - Kansas: "When we are looking at climate change, how does the agency plan for that?"

Eldon Gould, RMA Administrator: "I think the bigger issue more near term is what we can do about the producers that have declining yields and whether we can attribute that to climate change or an anomaly in a weather pattern."

Keith Collins, USDA Chief Economist: "It's very hard to know how this is going to play out over time. For crop insurance purposes, what is most important is if climate change leads to abrupt short-term changes in climate. Then the question for us is - is our rating appropriate? Are we giving producers the right amount of money given the losses that they've faced."

Rep. David Scott, D-Georgia :"It has not been clear how serious this administration is taking global warming."

Fielding questions about the Bush Administration's policy towards climate change, Collins defended USDA's efforts to limit greenhouse gases. The Agriculture Department's top number-cruncher cited the Conservation Reserve Program as USDA's pro-environment centerpiece.

He also claimed global warming could have a positive short-term impact for producers. And that an immediate rise in carbon-dioxide levels related to global warming could temporarily boost commodity yields.

Collins: "I personally think we are taking it seriously. You might not agree with the path of response but I think we have one."


Tags: agriculture climate change Congress disaster relief global warming government insurance news USDA