S. 1117: Quality Loss Adjustment Improvement for Farmers Act

This bill, titled the Quality Loss Adjustment Improvement for Farmers Act, proposes changes to the Federal Crop Insurance Act to improve how quality loss adjustments are handled for farmers. Here are the key components of the bill:

Periodic Reviews

The bill mandates that starting in 2025, the Corporation responsible for crop insurance will conduct a review of its quality loss adjustment procedures every five years. This review must be completed within one year after it starts. These reviews are intended to ensure that the procedures in place are effective and up-to-date.

Stakeholder Engagement

Each review will involve input from various industry stakeholders, which means that farmers and other local agricultural representatives will have an opportunity to share their perspectives and experiences regarding quality loss adjustments for their specific crops.

Reporting Requirements

After each review, the Corporation is required to submit a report to the Senate Committee on Agriculture, Nutrition, and Forestry and the House Committee on Agriculture, detailing:

• Findings from the review.
• Any changes to quality loss adjustment procedures that will be implemented as a result of the review.
• Details of the stakeholder engagement processes that took place during the review.

Regional Discount Factors for Soybeans

The bill introduces provisions regarding discount factors for soybeans in the event of certain disaster declarations, such as:

• A disaster declaration by the Secretary of Agriculture.
• A major disaster declared by the President.
• An emergency declared by the President.

When such a disaster declaration occurs, the Corporation will create a state or regional discount factor that reflects any quality discounts observed in the local or regional market prices for soybeans. This means that the value of soybean crops will be adjusted based on their quality and market conditions following such events.

Reporting on Discount Factors

Any discount factors established due to the above declarations will also need to be reported as part of the periodic reviews and included in the overall reporting process described earlier.

Summary of Changes

This legislation aims to enhance the quality loss adjustment process by instituting regular reviews, ensuring regional considerations are taken into account, and involving stakeholders in the decision-making process. Additionally, it addresses how quality issues for soybeans will be managed in the context of disaster scenarios.

Relevant Companies

• DE - Deere & Company: As a major manufacturer of agricultural machinery, any changes in crop insurance policies affecting farmers could influence equipment purchases and leasing.
• ADM - Archer-Daniels-Midland Company: A significant player in the agricultural sector, ADM may be impacted by the adjustments in soybean pricing and market conditions, which relate directly to their procurement and processing operations.
• SYY - Sysco Corporation: Changes to the agricultural market dynamics, especially with respect to soybean products, may affect supply chains and pricing strategies.