I am very pleased to be here at this conference this morning which is addressing my biggest agriculture priority -- the impacts of multi-year declines in yields on crop insurance guarantees. And therefore, I want to extent my appreciation to Secretary Veneman and her team here at the Risk Management Agency, in particular Dr, Keith Collins, Chairman of the Federal Crop Insurance Corporation and Ross Davidson for putting this issue on the fast track and organizing this event.  Therefore I will keep my remarks short so you can get to work.

If any of you are familiar with the Drought Monitor – a website I frequent often – you can see first hand how much of the west continues to face severe and even exceptional drought, a problem that is some areas is entering a third or fourth consecutive year.  For several years Kansans have suffered from a prolonged absence of moisture.  This situation has not changed, and we continue to see exceptionally dry weather.  The result of this drought has been a corresponding decline in APH, which is effecting the coverage levels for Kansas producers. 

Since becoming Chairman of the subcommittee with jurisdiction over crop insurance I held several hearings over the past year to learn of not only how Kansans view crop insurance but to learn how crop insurance is viewed across the country and across commodities.  The most common theme in these hearings was a call to fix the problems associated with multiple years of drought.  And, this has been the topic of every meeting I have had with RMA, leading to today’s event.    

My goal for this conference and for this process is not to expose shortfalls in the crop insurance program, we are here to encourage the development of another tool to the already effective risk management safety net for America’s farmers.   

To date, crop insurance has delivered much needed assistance to farmers for a variety of reasons.  Over the past several years RMA and the crop insurance industry has teamed together to provide $2.6 billion in 2000, $2.5 billion in 2001, $4.1 billion in 2002 and an estimated $3.2 billion in 2003.  In 2003 approximately 52 percent of the losses were related to drought.  This financial backstop has been a major help, however these indemnity payments alone were not enough – Congress delivered emergency payments to help producers cope with these disasters.

Now in Congress, we are dealing with a very large federal deficit, and it is likely that we will face some sort of budget reconciliation next year.  Therefore the likelihood of enacting further disaster relief payments is diminishing.  This leads to the issue of the day – finding a cost effective and fair way to address the problems caused by multiple years of natural disasters.