Testimony of Roger Johnson
Agriculture Commissioner
Senate Concurrent Resolution 4005
House Agriculture Committee
Peace Garden Room
March 14, 2003

Chairman Nicholas and members of the House Agriculture Committee, I am Agriculture Commissioner Roger Johnson. I am here today in support of SCR 4005, urging the United States Secretary of Agriculture to implement a cost of production insurance pilot program.

As a member of the National Association of Departments of Agriculture (NASDA) and Chairman of NASDA's Rural Development and Financial Security Policy Committee, cost of production insurance has been a high priority issue that I and others have been working on since 1999.

Realizing the need for and advantages of a cost of production insurance program, NASDA and the Farm Credit System contracted with AgriLogic, Inc. to research and analyze the concept. An extensive amount of work has been completed on this project with a pilot program proposal covering 12 crops submitted to the Federal Crop Insurance Corporation (FCIC). As of this time and unfortunately, the FCIC Board has tabled the proposal. Information on this Cost of Production Insurance project can be found online at www.agcop.com

NASDA policy supports cost of production insurance and NASDA recommended that it be a key component of the farm bill. Attached is the section of "NASDA's 21st Century Farm Policy Initiative" supporting the development and implementation of cost of production insurance, including benefits this insurance product would provide for financing beginning farmers.

I believe that a whole-farm cost of production insurance program could ultimately become a comprehensive low-cost insurance program. The substantially lower risk of insuring the cost of production on the entire farm should reflect reduced premiums in relation to the coverage of individual crops and units.

However, a pilot program covering a limited number of commodities must first be implemented to expand coverage to all crops and possibly livestock before whole-farm policies can be offered. I strongly agree that a cost of production insurance pilot program should be immediately implemented.

Chairman Nicholas and committee members, I urge a do pass on SCR 4005. I would be happy to answer any questions you may have.