Need for Agricultural Disaster Options Shows in 2014

A quick glance at 2014 might give the impression that Arkansas agriculture has had a banner year.

Riding an El Niño climate pattern that promoted rainfall and milder temperatures, the state saw good pasture growth for livestock this summer while also setting an overall yield record for winter wheat at 63 bushels per acre. Meanwhile, fall harvests have proven equally promising, with strong yields reported for many First District row crops, including multiple 100-plus bushels-per-acre soybeans.

And yet, despite the weather aiding 2014’s climb to the record books, we’ve had multiple dark “clouds” in the First District overshadowing our accomplishments.

First, we had serious flooding beginning June 28 across a swath of East-Central Arkansas counties that destroyed or damaged a large percentage of soybean, rice, and corn acres. Second, the Turner Grain Merchandising collapse occurred in the middle of August, where affected grain producers could not receive payment for crops they already harvested or booked for this fall’s harvest. Most recently, cotton growers in eastern Craighead County experienced a severe hail storm in early October that devastated tens of thousands of cotton acres ready for harvest. On top of these difficulties, producers have seen declining crop prices, meaning those “bumper” wheat and soybean yields don’t generate the same incomes as previous years.

In short, even the good years — and certainly the lean ones — carry challenges and hardships.

In the wake of these setbacks, I can think of no better time for Congress to address its inability to provide free-market disaster mitigation options to the men and women who meet our food and fiber needs. These tools would grant agricultural producers flexibility to properly secure their operations against outside forces including poor weather and business collapses; all without the Federal Government’s involvement.

I think of the Farm Risk Abatement and Mitigation Election (FRAME) Act as an example of a free-market approach to agricultural disaster preparedness. This pending bill would allow producers — recognized by the U.S. Department of Agriculture — the ability to set-up farm savings accounts, known as FRAME accounts, for the sole intention of weathering agricultural disasters. To enroll in the program, producers would first register with USDA’s Farm Service Agency. The FRAME accounts could then be administered by any bank, giving farmers the ability to manage contributions and investments as they see fit.

Consequently, when disasters inevitably strike, agricultural producers with free-market options wouldn’t have to wait on the Federal Government to provide assistance that often takes months or even years. They could immediately access their own savings set aside to survive the tough times, whenever they may occur. And whatever challenges 2015 might bring, producers would have a little assurance they’ll still be farming in 2016, and we’d have some assurance our food and fiber demands will still be met, too.

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