This bill mandates periodic, independent reviews of the Federal Crop Insurance Corporation's quality loss adjustment procedures, ensuring stakeholder input and establishing specific rules for soybean quality discounts following disaster declarations.
John Kennedy
Senator
LA
The Quality Loss Adjustment Improvement for Farmers Act mandates that the Federal Crop Insurance Corporation conduct external reviews of its quality loss adjustment procedures every five years, starting in 2025, ensuring input from regional industry stakeholders. Furthermore, the bill requires the Corporation to establish local "discount factors" for soybean quality loss adjustments following a federal disaster declaration, reflecting actual regional market prices. These changes aim to improve the fairness and accuracy of quality loss payments, particularly for soybeans during crises.
New Farm Bill Mandates 5-Year Reviews of Crop Insurance and Creates Special Disaster Discount for Soybeans
If you’re a farmer—especially one who grows soybeans—this bill is all about making sure the federal insurance payout you get for a quality loss actually matches what the local market is doing. It’s called the Quality Loss Adjustment Improvement for Farmers Act, and it changes how the Federal Crop Insurance Corporation (FCIC) manages its rulebook for when your crop is fine quantity-wise, but the quality has dropped (say, due to bad weather or disease).
The New 5-Year Policy Check-Up
Starting in 2025, the FCIC can’t just tweak its quality loss rules whenever it feels like it. This bill locks in a mandatory, recurring schedule for a full policy review. Every five years, the FCIC has to hire an independent, outside expert to look at how they calculate these quality adjustments. Think of it like a mandatory, external audit of their formulas. This review has to include industry voices—meaning they have to talk to farmers and stakeholders who are spread out geographically and represent all the different crops covered by quality loss adjustments. This is a big step toward transparency, ensuring that the rules aren’t just set in a room in D.C. but are informed by the people actually working the fields.
Once the review is finished, the FCIC has to report the findings, any planned changes to the rules, and what they learned from talking to the industry directly to the Senate and House Agriculture Committees. This means Congress gets a detailed look at the inner workings, which adds a layer of accountability that wasn't previously guaranteed. The trade-off here is that these mandatory, external reviews will add administrative costs and complexity for the FCIC, but the intent is to create a fairer system.
Soybean Disaster Relief: Matching the Local Market
Here’s the most specific and immediate change: soybeans get a special rule during a disaster. If the Secretary of Agriculture declares a disaster, or if the President uses the Stafford Act for a major disaster or emergency, the FCIC must act fast. If a “salvage market” pops up for damaged soybeans in that area—meaning buyers are offering steep discounts—the FCIC has to create a special “discount factor.” This factor must reflect the actual, typical quality discounts being applied to local or regional soybean prices during that crisis.
What does this mean in plain English? If a flood ruins the quality of your soybean harvest, and local buyers are only paying 50% of the normal price for those beans, the FCIC’s insurance payout calculation must use that 50% discount factor, rather than a generic, pre-set national number. This ensures that the quality loss adjustment is tied to the harsh reality of the local market during a crisis. This special disaster factor then has to be included in the regular five-year review process and reported to Congress, ensuring this ad-hoc disaster fix gets properly vetted over time.