clarinews@clarinet.com (CHARLES J. ABBOTT, UPI Farm Editor) (02/03/90)
WASHINGTON (UPI) -- An industry trade group asked the Bush administration Friday to try to salvage the federally subsidized crop insurance program rather than pursuing its plan to terminate it. The White House, as part of its fiscal 1991 budget, has proposed elimination of the costly program, which has consumed $5 billion in subsidies since 1980 but attracted fewer participants than hoped. ``This decision does not make good sense from either a budgetary or farm policy standpoint,'' the American Association of Crop Insurers protested in a letter to Agriculture Secretary Clayton Yeutter. The trade group pointed to a 1989 congressional study that concluded crop insurance was the fairest way to compensate farmers for crop disasters. However, the program has been criticized for costly premiums, inadequate coverage and low participation rates. From 1981-1988, the program paid out $1.56 for every $1 collected in premiums. ``The program has not been able to provide adequate risk protection for farmers at a reasonable cost to taxpayers,'' the administration said in calling for its elimination and offering to work with Congress to ``fashion a permanent disaster assistance program'' to protect farmers. The trade group pointed to recent upswings in farmer enrollment in crop insurance. Nearly 130 million acres were insured in 1989, half of the land on which crop insurance was available. ``Mr. Secretary, we urge that ... you consider making some radical changes in your current crop insurance program from top to bottom,'' the letter said. ``The recommendations for improving participation embodied in the reports of the Commission for the Improvement of the Federal Crop Insurance Program should not be ignored.'' The administration has said the commission's recommendations ``offered few suggestions to resolve the program's excessive losses and high federal costs.'' Yeutter has hinted the administration may suggest a possible replacement for crop insurance when it unveils its farm policy recommendations next week. Observers have said the recommendation to eliminate crop insurance was made as a way to ensure Congress works on the problem this year.