These internal conflicts lead to inaction as one role conflicts with another and in the end nothing gets done. USDA's role must be better defined in each of these areas. We think the Senators Roberts and Kerrey are on the right track in their approach to better define these roles. Mr. Chairman, we believe any direct federal subsidy to farmers will encourage production. The question is to what degree is production stimulated.
Crop insurance is based on market prices.
We do not believe that the insurance program distorts market prices as long as the insurance is based at or below market levels. In this regard it is the least intrusive of most direct federal subsidy programs. Yes, farmers may plant acreage with an insurance program that may not have otherwise been planted. However, we believe these are small amounts of acres at the margin. A farmer is still planting for the market with crop insurance.