Statement on Signing the Federal Crop Insurance Reform and Department of Agriculture Reorganization Act of 1994

Today I have signed into law H.R. 4217, the Federal Crop Insurance Reform and Department of Agriculture Reorganization Act of 1994. As the name implies, this Act has two purposes. The first is to reform Federal crop insurance and the second is to reorganize the U.S. Department of Agriculture (USDA).

H.R. 4217 provides the Secretary of Agriculture with the critically needed authority to reorganize USDA so that the Department can meet the challenges of the 21st century. It will be the most ambitious reorganization proposal ever undertaken by the Department. Guided by the principles articulated in the Vice President's National Performance Review, this legislation grants the Secretary authority to pursue more efficiently the goals of improving the prospects for farmers, enhancing the quality of life in rural America, better ensuring food safety, strengthening conservation efforts, and improving nutritional programs.

The Secretary will reorganize USDA around six basic missions, improve the Department's accountability and service to customers, reform its field structure, and reduce personnel and costs. Indeed, during 1994-1999, USDA will save $2.4 billion in personnel costs and about $1.3 billion in other costs. The end result will be a more streamlined and responsive Department.

This Act also reforms Federal crop insurance to address the frustrations of farmers with the inadequacies of the current system. Many farmers have not participated in the program and others have found that their losses for prevented planting were not covered. Those who relied on ad hoc disaster assistance did not know until weeks or months after their loss whether such assistance would be provided, leaving many fearful of losing their farms and livelihood.

The need for reform became apparent during last year's devastating flood in the Midwest and drought in the Southeast. Out of that experience, the Administration made a commitment to reform the current program, and began consultations with Members of the Congress, farmers, insurance providers, lenders, and others on developing a legislative proposal.

The Administration proposal was included in the 1995 Budget submitted to the Congress last February. The Administration and many Members of the Congress have spent several long months fine-tuning this proposal so that it would meet budget-scoring requirements and other considerations.

This Act is substantially similar to the Administration proposal. It provides for a minimal level of catastrophic coverage for most crops, greater incentives for producers to buy additional coverage, payment assistance for other crops where insurance is not available, and reforms to the disaster payment system that should greatly reduce the incidence of fraud. It requires producers who participate in USDA's farm income support and credit programs to sign-up for catastrophic coverage on their insurable crops, and eliminates the use of emergency legislation for agricultural crop disaster assistance. Producers will be able to obtain catastrophic insurance coverage for a nominal processing fee. Yet, taxpayers will save money compared to the current approach of enacting ad hoc disaster assistance year after year.

I want to thank Secretary Espy for the tremendous and tireless work he and his staff have put into developing a reorganization plan that will make USDA more farmer-friendly, improve customer service, and save taxpayer money. I also wish to thank the chair and ranking member of the Senate Committee on Agriculture, Nutrition, and Forestry, Senators Patrick Leahy and Richard Lugar, and the chair and ranking member of the House Committee on Agriculture, Representative "Kika" de la Garza and Pat Roberts, as well as Representative Charles Stenholm, for their leadership in guiding the bill through to passage.

The Administration is committed to reinventing the Federal Government, so that it works better and costs less for all Americans. By authorizing the reinvention of USDA, this Act sets the standard for the rest of the Federal Government to follow and is a victory for American taxpayers.

WILLIAM J. CLINTON

The White House, October 13, 1994.