H.R. 442: Quality Loss Adjustment Improvement for Farmers Act

The "Quality Loss Adjustment Improvement for Farmers Act" aims to amend the Federal Crop Insurance Act, specifically focusing on quality loss adjustment coverage for farmers. Here is a breakdown of the key components of the bill:

Periodic Reviews

Starting in 2025 and every five years thereafter, the Corporation responsible for federal crop insurance will contract with an external, qualified entity to review the quality loss adjustment procedures. Each review must be completed within a year from its start date.

Incorporation of Stakeholder Input

Each review will actively involve a range of stakeholders from different regions within the agricultural sector for each commodity that has quality loss adjustment provisions. This is aimed at ensuring that diverse perspectives are considered in the review process.

Reporting Requirements

After each review, the Corporation is required to submit a report to the Senate and House Committees involved in agriculture. This report will outline:

• The findings from the review.
• Any changes made to the quality loss adjustment procedures.
• Details of stakeholder engagement that occurred during the review.

Regional Discount Factors for Soybeans

The bill introduces specific provisions related to soybeans, including:

• Covered Declarations: This includes disaster declarations by the Secretary and major disasters or emergencies declared by the President.
• Establishment of Discount Factors: In the event of a declared disaster or a salvage market situation for soybeans in a specific region, the Corporation will set a discount factor. This factor reflects average quality discounts applied to local soybean market prices.
• Inclusion in Reviews: Any state or regional discount factors created will be documented in periodic reviews and in the related reports on those reviews.

Overall Objective

The overall objective of this bill is to improve how quality loss adjustments are handled, making the system more responsive to regional agricultural conditions and stakeholder needs, while also ensuring transparency in the adjustments made for quality losses, particularly in the soybean market.

Relevant Companies

• DE (Deere & Company): As a major manufacturer of agricultural equipment, changes in crop insurance provisions related to quality loss adjustments may affect demand for their machinery based on farmers' financial stability.
• HSY (Hershey's): As a company that uses agricultural commodities, fluctuations in soybean quality and pricing could impact their supply chain and costs.