Today we meet to discuss the President’s Fiscal Year 2000 Budget for the Department of Agriculture.  I want to welcome Secretary Glickman who is here to review the Administration’s budget proposals.

 Despite calling on the Congress to overhaul the federal crop insurance program, the President’s  Budget contains no specific proposal or funding to pay for program improvements.  Instead of specifics, the Administration has released a group of general proposals.

 These proposals would raise federal protection available to farmers for catastrophic crop losses,  increase subsidies for higher and more comprehensive “buy-up” crop insurance, and authorize  USDA to address special concerns such as multi-year crop losses.   Perhaps most important, the Administration is also seeking authority for USDA to extend federal insurance subsidies to livestock producers.  In order for these changes to take effect with the 2000 crop year, the Administration says legislation must be enacted this year.

 Overall, the President projects a cumulative budget surplus of $828 billion over the next five fiscal years assuming a continuation of current law.   The Administration proposes to commit every dollar of this projected surplus to Social Security, Medicare, new Universal Savings Accounts, military readiness, education, and other spending priorities.  No funding is provided for crop insurance improvements.  Instead, the Agriculture Department has suggested publicly that, if other means are not possible, the Congress could provide emergency appropriations to cover crop insurance improvements.   That approach would immediately reduce funds available for Social Security and other needs that the Administration says are critical.

 We need to learn of the Administration’s actual proposal.  Discussion of  improving crop insurance has raised farmers’ expectations about what Washington can accomplish this year.  Farmers deserve a serious discussion about this subject.  We need to know how much these proposals will cost, which in the USDA’s view have top priority, and USDA’s suggestions regarding budget offsets.  The Committee will follow up next month with comprehensive hearings on crop insurance and risk management issues.

 Farmers in Indiana, like those in most states, have a sense that the federal crop insurance program has improved and that it certainly offers more choices than was the case in the past.  But to many Hoosier producers, crop insurance means maintaining detailed records, struggling to keep up with complex and frequently changing policy provisions, and premiums that, too often, seem excessive for inadequate coverage.

 According to Rain and Hail Insurance Society, Indiana farmers insured only 44% of their eligible acres with federal crop insurance in 1998 compared to 82% in North Dakota, 81% in Iowa, 78% in Texas and Nebraska, and 67% for the nation as a whole. Fortunately, widespread adverse weather conditions are relatively rare in Indiana.  As a result, Indiana crop yields are not as volatile as yields in many other states.  USDA states that it sets crop insurance premiums to reflect the relative risk of farming in each state.  Thus, one would assume that Indiana insurance premiums should be lower than those in many other states and that participation rates across the states should be comparable.  Obviously, this is not the case.  I would like USDA to perform a comprehensive review of crop insurance premiums in Indiana and other low risk states to determine whether premiums accurately reflect the local risk of farming or the extent that low risk states subsidize high risk states.

 I look forward to hearing from Secretary Glickman on the Department’s food assistance program to Russia.  We need to know that U.S. food aid is actually getting to Russians who are truly in need  rather than being diverted for inappropriate purposes.

 The Agriculture Committee maintains a strong interest in USDA’s efforts related to the year 2000 computer problem.  I was pleased to appear recently before the Senate Special Committee on the Year 2000 Technology Problem with Secretary Glickman to present testimony on Y2K and the food supply.  We look forward to hearing from him on the Department’s progress to date in Y2K remediation and on business continuity plans for those systems that will not be compliant in time.

 One of the program highlights in the Department’s budget request refers to the creation of a unified system of information technology management.  I will soon reintroduce legislation that the Senate passed last year to facilitate the centralized management of the Department’s information technology investments.  The USDA Information Technology Reform and Year-2000 Compliance Act of 1999 will also mobilize the Department’s resources in an effort to minimize Y2K-related disruptions in the delivery of services.