Testimony of Roger Johnson
Agriculture Commissioner
Senate Concurrent Resolution 4010
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 4010, urging Congress to adopt whole-farm cost of production insurance that is based on a producer's actual production history.

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. 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.

I believe that a whole-farm cost of production insurance program could ultimately become a comprehensive low-cost insurance program, which could be expanded to cover all crops and livestock.

Although cost of production insurance was included in the Agricultural Risk Protection Act of 2000, NASDA recommended that an additional $1 billion be provided annually to expedite the development of cost of production policies. Section 10006 of the Farm Security and Rural Investment Act of 2002 also requires the Secretary of Agriculture to submit a report to the House and Senate agriculture committees on progress made in research and development of risk management products including cost of production insurance.

Because the FCIC has yet to implement a cost of production insurance pilot program, I strongly support SCR 4005. To further strengthen the message of support for cost of production insurance development, I also support this resolution. However, since cost of production insurance is already included in federal legislation, I am offering a suggested amendment urging Congress to fully fund and request that the Secretary of Agriculture expeditiously implement and expand whole-farm cost of production insurance. A proposed amendment is attached.

Chairman Nicholas and committee members, I urge a do pass on SCR 4010. I would be happy to answer any questions you may have.