WASHINGTON -- Legislation that would help protect agricultural lenders against losses from corp failures moved a step closer to enactment this week.
Senate hearings began Wednesday on the proposed Federal Crop Insurance Reform Act, which would make government disaster payments available to farmers who purchase low-cost insurance from the government.
Similar Bill Went to House
Sen. Patrick Leahy, D-Vt., introduced the Senate version of the bill Tuesday. A similar bill had been introduced in the House by the chairman of the Agriculture Committee, E. "Kika" de la Garza, D-Tex., a month ago.
Banking industry lobbyists give the bill a better-than-even chance of passing.
Agricultural lenders would rather rely on crop insurance than the uncertainty of ad hoc disaster aid to protect the collateral on their operating loans.
'Certain Peace of Mind'
"We think that farmers need a reliable safety net in terms of disaster," said Ed Alwood of the American Bankers Association. "When the insurance is there, it also gives the lender a certain peace of mind."
"It's bankable," said Sen. Bob Kerrey, D-neb., at a Senate Agriculture, Nutrition, and Forestry Committee hearing Wednesday. "Ad hoc disaster relief is too dependent on the whims of Congress. [Crop insurance rates] reflect risk more closely."