NACIA Washington Update
October 8, 2009

The trend continues – health care is still the topic du jour here on the Hill. Senator Baucus’s bill has completed consideration in the Senate Finance Committee, but the Committee will not vote on the measure until next week. One reason for the delay is that the Committee Members were waiting on the Congressional Budget Office estimate of how much the bill would cost, which arrived yesterday afternoon. The House also re-engaged in health care reform activity, holding a series of closed-door discussions also yesterday afternoon. 

On the crop insurance side, preliminary SRA renegotiations continue. The companies are offering comments to RMA, and will have them submitted around the middle of this month. RMA will take those comments and prepare a draft agreement, which is expected to be ready early to mid-November. At that point is when the significant discussions and negotiations begin. Some issues have been floated that will be topics of discussion during the negotiations, including finding ways to keep and promote participation in chronically under-served states. This may or may not include some adjustment to A&O and underwriting gains. There has also been discussion of a “smoothing” of A&O, referring to developing a process to lessen the effects of commodity prices—making the mountains a little lower and the valley’s a little higher, so to speak. While the preliminary discussions have been non-controversial, that may not continue as the talks progress. RMA seeks to obtain savings from the program and the companies hope to keep program participation financially viable. These two opposing motivations could contribute to a difficult situation. 

This week NACIA and other industry leaders were invited to the Hill to discuss crop insurance with the leadership of the House Agriculture Subcommittee on General Farm Commodities and Risk Management, which has jurisdiction over the crop insurance program. Formerly headed by Representative Etheridge (D-NC), the Subcommittee is now led by Chairman Boswell (D-IA).  Chairman Boswell and Ranking Member Moran (R-KS) spent an hour listening and gathering information on several aspects of the crop insurance program, including the status of the SRA renegotiation, the state of the industry, under-served states and regions, agent commissions, GAO reports, the Milliman study, producer views on the program, and new products. Both the Representatives discussed the topics actively, stated their support for the program, and recognized its importance to farmers. 

Some USDA activities that may be of interest include the following: 

• Secretary Vilsack announced that enrollment for the 2010 Direct and Counter-cyclical Program and the Average Crop Revenue Election program has begun and will continue through June 1, 2010. Details.

• While not directly related to crop insurance, we thought the report that USDA just released was interesting.  Currently, 20.9 million acres of U.S. agricultural land are owned or partially owned by foreign persons. The Farm Service Agency report, “Foreign Holdings of U.S. Agricultural Land,” is available here, and the release discussing the report is available here.

• RMA has issued an announcement regarding one of the actions from the recent FCIC board meeting.  The announcement discusses the recently approved technology, SmartStaxTM, as a qualifying hybrid for the Pilot Biotechnology Endorsement program, beginning with the 2010 crop year. Details.

• Tobacco buy-out program sign up ends soon – USDA today released a reminder to  tobacco quota holders and producers that are not currently enrolled in the Tobacco Transition Payment Program that they have until Nov. 2, 2009, to sign-up to receive a 2010 payment.  Details.

While agents are not technically a part of the SRA renegotiation, NACIA is working hard to ensure that when opportunities to weigh in are available, the agents’ voice is heard. As the only organization that represents only agents, and represents agents from all companies, it is important that NACIA has a strong Washington presence to ensure that agents’ interests are heard. So please pay your 2009 dues. 

As always, please let us know if you have any questions. 
Brent W. Gattis
NACIA Washington Representative

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