REMARKS BY ADMINISTRATOR ELDON GOULD
At the Indian Nations Conservation Alliance (INCA)
and The Intertribal Agricultue Council (IAC)
Flamingo Hotel, Las Vegas, NV
Dec 7, 2006

I am the Administrator of the USDA’s Risk Management Agency (RMA). I am also a producer of corn, wheat and soybeans, and have a 700-sow farrow-to-wean hog operation.

I’d like to thank Dick Gooby, the Executive Director of INCA, for inviting me to speak here today. I’d also like to thank Ross Racine of the Intertribal Agriculture Council for his assistance. It is a great pleasure to be here this morning for your annual symposium.

As a vital part of the USDA, the Risk Management Agency plays an essential role in American agriculture by promoting, supporting and regulating sound risk management solutions to preserve and strengthen the economic stability of America’s agricultural producers.

Crop insurance is the government’s principal means of helping farmers survive a major crop loss. It is also extremely useful to you, the agricultural producer, even when it is not paying on losses because it enables you to get loans approved, helps you aggressively market a portion of your crop and lets you plan more reliably for your future.

For 2006, the Federal crop insurance program is projected to provide producers with nearly $50 billion in protection on approximately 242 million acres through about 1.1 million policies. There are 22 plans of insurance available and nearly 30 new insurance products under various stages of evaluation or development. Approximately 80 percent of acres of major program crops are insured, with many at higher levels of coverage.

As you well know, farming is an inherently risky endeavor. The producers that do the best job of managing these and other risks stand the best chance of being successful. Understanding risk management principles is vital to the success of our farmers.

Crop insurance is an integral part of any farm or ranch risk management plan, but can sometimes be complicated. It’s not always easy to get useful information in the hands of limited-resource farmers and ranchers. However, RMA has become a leader at USDA at providing this type of outreach. We want to make sure that small and limited resource farmers receive information about the products and services available to help them survive and thrive in agriculture. Our regional offices meet numerous times through out the year with tribal sponsored groups to help folks understand how to use this valuable tool.

We are particularly proud of our successful education and outreach partnership agreements. Using these agreements, we reach producers with the best risk management information possible through universities, community and tribal-based organizations, commodity groups and an array of state programs.

On September 28, we announced awards of $21 million in risk management partnership agreements for 2006. RMA Outreach committed over $1 million toward projects and programs serving Native American producers. Of these funds, over $575,000 was committed to partnerships specifically targeted toward Native American producers.

I’d like to highlight a few of these partnerships.

• We gave $100,000 to Intertribal Agriculture Council, Inc. to educate American Indian Agriculture producers in Montana on risk reduction therefore directly impacting their respective agriculture economies
• The National Tribal Development Association received $115,000 to collectively research, analyze, and develop a variety of training instruments to educate and provide hands-on instruction about the importance and proper utilization of the crop insurance program.
• Fort Peck Community College received $85,000 to provide socially disadvantaged young high school-aged American Indians in Montana and North Dakota involved in agriculture with the knowledge, skills, and tools necessary to understand yield, price and revenue risk and make informed risk management decisions in their decisions about pasture, rangeland and forage, livestock and specialty crop RMA risk management tools.

In addition, RMA has formed new collaborations with community-based organizations such as Developing Innovations in Navajo Education. The Western Navajo Nation Traditional AG Outreach program provides support and direct services to disadvantaged Navajo families within eight communities of the Southwestern region of the Navajo Nation.

RMA insurance programs provide a vital means for Native producers to mitigate loss. Producers should carefully consider how a policy works in conjunction with their other risk management strategies to insure the best possible outcome each year. IAC and other organizations and institutions, as well as Livestock insurance agents and other agri-business specialists in the private and public sectors can assist you in developing a good risk management plan.

RMA recently announced expansion of the AGR-Lite program; it will be available in 28 states for the 2007 crop year. AGR-Lite is a whole- farm revenue plan of insurance, developed by the Pennsylvania Department of Agriculture, providing protection against low revenue due to unavoidable natural disasters and revenue fluctuations. Policies are limited in size to a maximum liability of $1 million annually. Most farm-raised crops, animals, and animal products are eligible for protection. The plan uses a producer's 5-year historical farm average revenue, as reported on IRS tax returns (Schedule F or equivalent forms) and the current year's farm plan, as a basis to provide a level of guaranteed revenue for the insurance period.

The AGR-Lite plan can stand alone or be used in conjunction with most other federal crop insurance plans. It provides insurance coverage for multiple agricultural commodities under one insurance product and establishes revenue as a common denominator of insurance for all agricultural commodities on that farm.

I know many of you here are livestock producers. Our Livestock programs include Livestock Gross Margin for Cattle that provides protection against loss of gross margin – the market value of livestock minus feed costs. Another program is Livestock Risk Protection for Cattle. It protects producers of feeder cattle and fed cattle from unexpected declines in the market price. There are also Livestock Gross Margin and Livestock Risk Protection programs for Swine available to pork producers with market hogs.

Recently, the FCIC Board approved Livestock Risk Protection for Lamb to become effective in 27 states in 2007. Some of the western states that are among the 27 include: Arizona, California, Colorado, New Mexico, Nevada, Oklahoma, Oregon, Texas and Utah. LRP Lamb is similar in concept to LRP for swine and cattle, offering protection against declines in slaughter lamb prices. Producers are offered coverage prices based on a statistical model that uses various industry data, such as cutout, slaughter, weight, and pelt information, to forecast cash prices at the policy end date. As policies mature, producers receive insurance payments if the cash index, a figure based on actual Agricultural Marketing Service market information, is below the coverage price purchased.

RMA now offers two new pilot Group Risk Protection risk management programs for pasture, rangeland, and forage (PRF). These innovative pilot programs are based on vegetation greenness and rainfall indices and were developed to provide livestock producers the ability to purchase insurance protection for losses of forage produced for grazing or harvested for hay. Beginning with the 2007 crop year, the pilot programs will be available for a limited number of acres for testing in selected States.

Risk management education and outreach is essential to the future success and survival of Indian farmers. We know that reaching out to tribal and Nation entities will help the smaller Indian farmers – the folks who need crop insurance protection the most. The larger operations are aware of the value of insurance, but many of the small farmers and ranchers still think of insurance as something they can’t afford, when it could be the only thing allowing a small farm or ranch to stay on its feet in a bad year.

We will continue to work with tribal and Nation entities as needed to effectively serve Indian communities by keeping farmers and ranchers informed of new products and helping them obtain the knowledge, skills and tools needed to survive and thrive in this dynamic economy. It is crucial that we regularly share and compare information and perspectives to make sure we do not miss an opportunity to promote education and outreach within your communities and Nations.

The Bush Administration has made the federal crop insurance program the cornerstone of a stronger farm safety net. We at the Risk Management Agency are committed to the continuing transformation of this important program into a broad-based safety net for farmers and ranchers. We will do our best to make sure that you and all American agricultural producers remain solid, solvent and competitive.

Thank you for this opportunity to speak with you.