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When we
think of potential targets for terrorists we usually visualize big
buildings in large urban areas. But other likely targets are much closer
to home and perhaps even more frightening.
Terrorist
attacks aimed at our agricultural production and transportation
facilities could hit us hard, especially here in Alabama. There are over
1.3 million head of cattle in Alabama and we rank second in the nation
in poultry production. The 2000 census counted 476,000 jobs dependent on
agriculture in our state, injecting $43 billion into the economy – 22%
of our total economic output. A bioterrorism attack, even one that didn’t
do much actual damage, could result in consumer fears that would wreak
havoc on our agricultural industries.
Getting
agricultural and other products to the market is also big business in
our state. The Port of Mobile is the 14th largest in the nation. Like
farms and agricultural production facilities, ports would make easy
targets for even small bands of terrorists. Over 118,000 jobs depend on
the Alabama port system. Therefore, terrorist actions aimed at a port
facility would have a significant impact on a lot of people.
Unfortunately,
it’s impossible to completely prevent the risk of a terrorist attack.
If a terrorist group is willing to sacrifice their lives to make a
violent statement, there’s not much that can be done to stop them.
That’s why we must work to insulate ourselves from the effects of
their actions. One of the primary methods to accomplish this is ensuring
that those at risk have access to adequate insurance protection.
Since
2001, the federal government has played a key role in guaranteeing the
American business community access to affordable terrorism insurance.
This has been achieved through the Terrorism Risk Insurance Act (TRIA),
passed by Congress to mitigate the impact of the 9/11 attacks.
After
9/11, private sector insurance companies withdrew terrorism coverage
from most standard policies, fearful of financial ruin from other,
perhaps even larger attacks. TRIA stabilized the insurance market by
providing private companies with a federal cushion for losses that
exceeded their ability to pay. This public/private partnership proved to
be an adept move, making coverage once again available and helping to
fuel the economic recovery of the last four years.
TRIA was
passed as a temporary measure and is set to expire on December 31st.
Many financial experts and economists are calling for its extension,
citing its beneficial effect on our economy and the risk that arises
without insurance protection from terrorist activity.
The Bush
Administration has voiced opposition to extending TRIA in its present
form, calling for more private sector involvement. Treasury Secretary
Snow has praised TRIA’s past performance and reported that certain
structural changes would draw the Administration’s support. Even
Federal Reserve Board Chairman Alan Greenspan has commented that the
terrorism insurance market does not work well without governmental
support.
Congressional
support for continued federal involvement in terrorism insurance comes
from both sides of the political aisle. Senate Banking Committee
Chairman, Alabama Senator Richard Shelby said "Personally, I think
there should be a program," after hearing Secretary Snow’s
testimony. Many people, in both government and the private sector,
agree.
TRIA has
served this country well, taking us from the uncertainty following 9/11
to the economic prosperity we enjoy today. If it’s allowed to expire
without a replacement, our fortunes could reverse. Agricultural and
transportation businesses in Alabama need the assurance of long-term,
stable insurance protection. Indeed, the absence of insurance coverage
will hamper business expansion and economic growth, even if we avoid
further terrorist attacks. Congress needs to formulate a sensible
successor to TRIA and get it in place without delay.
Ron
Sparks, Commissioner of the Alabama Department of Agriculture and
Industries, currently serves as President of the Southern Association of
Departments of Agriculture. He can be contacted at ron.sparks@agi.alabama.gov. |
