Testimony of Roger Johnson
Agriculture Commissioner
Senate Concurrent Resolution 4010
Senate Agriculture Committee
Roosevelt Park Room
January 31, 2003

Chairman Flakoll and members of the Senate 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 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. The substantially lower risk of insuring the cost of production on the entire farm should reflect reduced premiums compared 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. Because a cost of production insurance pilot program must first be implemented and SCR 4010 and SCR 4005 compliment each other, I also support SCR 4005. I strongly agree that a whole-farm cost of production insurance program should be immediately adopted by Congress.

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