WASHINGTON, D.C. – On May 4, Jason Meador, Head of Rural Community Insurance Services (RCIS), delivered testimony in front of the Senate Agriculture, Nutrition, and Forestry Committee –Subcommittee on Commodities, Risk Management, and Trade. Joined by several other witnesses within the Crop Insurance and Banking industries, respectively, Meador’s testimony centered around the complementary relationship between Crop Insurance and climate-smart agriculture; Crop Insurance and disaster assistance; Improvements to Section 508(h) (a section in the Federal Crop Insurance Act promoting innovative improvements to the Crop industry); and the Administrative and Operating Expenses within the Federal Crop Insurance Program.
Further, during the beginning of the hearing the Chair for the Subcommittee on Commodities, Risk Management, and Trade, Tina Smith (D-MN), underscored how the importance of securing food supply is contingent on food producers having the necessary tools to lessen the negative impact of supply chain disruptions, the effects of climate change, and high input costs. Chair Smith also mentioned her interest in what the committee can do to assist with providing more access to risk management programs for small and mid-size farms. Similarly, Ranking Member Cindy Hyde-Smith (R-MS) echoed the same sentiment regarding the challenges farmers continually face within a volatile market. She noted the importance of acknowledging the next generation of farmers and preserving the industry.
During the Question-and-Answer portion of the hearing, both Senators and witnesses discussed access to credit during periods of high inflation and the benefit of increasing the Farm Service Agency (FSA) loan limits; the flexibility of meeting the needs of diverse producers nationwide including whole farm coverage; and the incentives available to young farmers when pursuing a career in agriculture.
When asked if bank failures have increased the cost of capital as it pertains to Crop insurance, Meador maintained that “Rural Community Insurance Services (RCIS) has access to broader capital and is less affected by increased costs of capital, and in this case, investments focus on assets matching liability, so liquidity issues are different.” When asked what could be done to get farmers a higher level of crop insurance coverage and what role could supplemental and advance coverage play, Meador stated that “Crop insurance is the most important risk management tool, and the 508(h) Program allows for the development of new products to enhance the Federal Crop Insurance Program, including area-based coverage plans, premium discounts, and index products for additional coverage.” Adding that, “crop insurance is currently farmers’ first line of defense” against climate change. Lastly, Meador informed the committee of the RCIS apprenticeship program, and its benefits for young farmers—“RCIS will pay young adults or military veterans to get an agriculture degree from Northeast Iowa Community College while working (at RCIS) and graduates are guaranteed a full-time job with RCIS after graduation.”
Given Congress’s reauthorization of the Farm Bill—which is projected to be voted on by Members of Congress this Fall—Meador’s testimony and discussion of the challenges and opportunities faced by RCIS and the Crop insurance industry could not be timelier.
Learn more about what a Farm Bill is here.