Letter to Sanford Bishop, Chair of the House Appropriations Committee Subcommittee on Agriculture, and Andy Harris, Ranking Member - Seeking Relief for Specialty Crop Farmers

Letter

Dear Chairman Bishop and Ranking Member Harris,

We write to urge you to provide equitable relief with respect to crop insurance for specialty crop farmers in the fiscal year 2023 agriculture appropriations bill.

As you are aware, specialty crop insurance funding has been cut dramatically, due to an unintended impact of the 2011 cap on administrative and operative (A&O) expense reimbursement. This feature of the contract between the Federal Crop Insurance Corporation (FCIC) and the crop insurance companies was intended to ensure that, when the prices of crops like corn, wheat, soybeans, or cotton increase, A&O costs associated with these crops' policies do not also significantly rise.

This effort to manage A&O costs affects all crop insurance policies--including specialty crops that have not seen the same price increase as row crops. Yet, specialty crop insurance is subject to the same A&O caps, resulting in steep decreases to specialty crop insurance funding.

We have seen the effects of this flawed funding design play out through recent years. Since the 2020 crop year, crop insurance funding for specialty crops will experience a nearly 40 percent cut, with Florida among the top five states to be hit the hardest. The sharp rise in row crop prices due, in part, to the war in Ukraine is expected to result in the continued downward pressure on specialty crop funding. These deep cuts are being made to funding levels that have already been flat since 2015, despite rising inflation and other factors. This situation is unsustainable and needs to be addressed before serious damage is done to the risk management infrastructure for specialty crops.

We have an opportunity to mitigate this inequity for specialty crops risk management without amending the Federal Crop Insurance Act or reopening the contract between FCIC and the companies. We respectfully urge you to provide relief for delivery of specialty crop insurance policies and the producers they support by including a provision to restore specialty crop A&O to the level that preceded the run up in row crop prices in this year's agricultural appropriations bill.

Thank you for your consideration of our request.