Statement of Administration Policy: H.R. 2893 - Agriculture Disaster Assistance Act of 1991

(House Floor)
(de la Garza (D) TX and Coleman (R) MO)

The Administration strongly opposes H.R. 2893. If appropriations legislation is passed to implement this disaster relief funding as an "emergency", the President's senior advisers will recommend a veto.

It is too early to tell whether any crop disaster will occur in 1991. Most crops are in the ground and have yet to be harvested. For 1990 crops, it is impossible to measure retroactively any losses, in that the crops have already been harvested. The Administration has already taken steps in response to this year's weather conditions, expanding through administrative means an array of Federal disaster-related programs. H.R. 2893 would undermine both the 1990 Farm Bill and the budget discipline of the Omnibus Budget and Reconciliation Act of 1990 (OBRA). It is a simple attempt to authorize more spending, outside of the restraints of the Budget Agreement. If a crop disaster does occur in 1991, the Administration will work with Congress to address that at a later date.

Federal crop insurance already covers most individual producer losses — it is an extensive program to provide disaster protection to our Nation's farmers. However, H.R. 2893 would severely undermine the Federal crop insurance program.

No national agricultural disaster is expected in 1991.

—   Although 1991 spring-planted crops have not been harvested yet, no national disaster is expected. At this time, all forecasts predict a normal or above normal harvest in the fall for these major crops.

Federal Crop Insurance already covers most individual losses and is the Nation's disaster protection program.

—   Over $1 billion in crop insurance indemnities has already been paid for 1990 individual losses.

—   Insurance is subsidized to ensure affordability — the Federal government pays almost half of the program's cost.

—   Insurance is available to cover almost all cropland — nearly 90 per cent of all acres were eligible for coverage in 1991.

—   Other government programs supplement crop insurance, making available close to $700 million in 1991 assistance: Emergency Livestock Feed, Emergency Conservation, Forage Assistance (Haying/Grazing), Farmers Home Emergency Disaster Loans, and Emergency Watershed Protection.

—   The Administration has expanded the availability of these programs for 1991.

H.R. 2893 would severely undermine the crop insurance program which Congress has directed the Administration to fix.

—   Ad hoc disaster payment assistance undermines crop insurance: producers expect a free disaster assistance bailout and, therefore have no incentive to buy crop insurance.

—   Prudent farmers bought crop insurance for 1991; this bill penalizes them and undermines the integrity of the crop insurance program. Crop insurance is fully funded for 1991 and sales were aggressively pursued by both the Government and the private sector.

H.R. 2893 could be extremely costly and would undo the Farm Bill and OBRA budget discipline.

—   H.R. 2893 differs from past disaster authorizations in that the universe of disaster claims has been greatly expanded. Major changes include: losses based on individual "producers" instead of "farms", mandating "quality" loss payments, double payments for wheat replacement crops, redefinition of "crop year" for Valencia oranges, and fish loss payments.

—   The incremental increased cost could total $2 billion or more if the authorized assistance were fully funded. These costs are in addition to the $700-900 million estimated cost of 1990 disaster authorizations.

—   Deficit reduction efforts were serious and allowed for spending on a true emergency, but to declare one where none exists is merely a budget gimmick to avoid spending restraint.

—   The bill would encourage other special interest groups to use thinly-disguised devices to boost funding.