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103D CONGRESS

1ST SESSION H. R. 3623

To amend the Federal Crop Insurance Act to establish a pilot program

to evaluate the feasibility of including crop insurance based on costs

of production among the types of crop insurance available under the

Act.

IN THE HOUSE OF REPRESENTATIVES

NOVEMBER 22, 1993

Mr. BARCIA of Michigan (for himself and Mr. DINGELL) introduced the

following bill; which was referred to the Committee on Agriculture

A BILL

To amend the Federal Crop Insurance Act to establish a

pilot program to evaluate the feasibility of including crop

insurance based on costs of production among the types

of crop insurance available under the Act.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SEC. 1405. PILOT PROGRAM TO PROVIDE CROP INSURANCE

4 BASED ON COSTS OF PRODUCTION UNDER

5 THE FEDERAL CROP INSURANCE ACT.

6 The Federal Crop Insurance Act is amended by in7 serting after section 508A (7 U.S.C. 1508a) the following

8 new section:
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1 ‘‘SEC. 508B. PILOT PROGRAM TO INSURE AGRICULTURAL

2 PRODUCERS FOR THEIR COSTS OF PRODUC3 TION.

4 ‘‘(a) DEVELOPMENT OF PILOT PROGRAM.—The Cor5 poration, in cooperation with the Economic Research Serv6 ice of the Department of Agriculture, shall develop and

7 evaluate alternative methods to include among the crop

8 insurance options available under section 508 an insur9 ance coverage option under which agricultural producers

10 are indemnified based on their average costs of production

11 when they sustain losses to insured commodities as a re12 sult of adverse weather and other unavoidable causes. To

13 assist the Corporation, the Secretary of Agriculture shall

14 direct the Economic Research Service to prepare alter15 native designs for a pilot program to evaluate the feasibil16 ity of using insurance coverage based on costs of produc17 tion and to develop guidelines for the implementation of

18 the pilot project.

19 ‘‘(b) IMPLEMENTATION OF PILOT PROGRAM.—Be20 ginning in crop years after crop year 1994, the Corpora21 tion shall implement the pilot program developed under

22 subsection (a) in those areas of the United States that

23 the Corporation determines have traditionally suffered lev24 els of crop losses necessitating large amounts of payments

25 under Federal crop disaster relief laws. The Economic Re26 search Service shall assist the Corporation in introducing
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1 the pilot program to the crop insurance industry and agri2 cultural producers and in collecting and evaluating the re3 sponse of the industry and producers to the pilot project.

4 ‘‘(c) RECOVERY OF COSTS OF PRODUCTION.—Under

5 the pilot program, an agricultural producer who sustains

6 a loss of an insured commodity as a result of adverse

7 weather or other unavoidable cause would receive an

8 amount based upon the average costs incurred by the pro9 ducer to plant, raise, and harvest the crop, including the

10 cost of seeds, fertilizer, and labor. The Economic Research

11 Service shall propose to the Corporation alternative meth12 ods to measure such costs and calculate recovery amounts.

13 ‘‘(d) EVALUATION OF PILOT PROGRAM.—As soon as

14 practicable after the end of 1995 crop year, the Economic

15 Research Service shall submit to the Secretary and the

16 Corporation a report evaluating the performance of the

17 pilot program since its implementation. The report shall

18 include an examination of the costs and benefits of the

19 pilot program to agricultural producers who participate in

20 the program and the effect of the program on Federal ex21 penditures under this Act and Federal crop disaster relief

22 laws.’’.

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