OpEd: Crop insurance negotiations should put farmers first

<

p class="MsoNormal" style="mso-margin-top-alt:auto;margin-bottom:6.0pt">OpEd: Crop insurance negotiations should put farmers first

By Jordan Roach

© Copyright Agri-Pulse Communications, Inc.

Fresno, CA, June 2 - One thing seems to be missing from the ongoing negotiations over the future of America's crop insurance program: farmers.

Globally Positioned Agriculture

The U.S. Department of Agriculture (USDA) has largely focused on dollars and cents instead of the men and women who put food on our tables, clothes on our backs, and fuel in our cars.

In fact, the USDA has even suggested crippling cuts to crop insurance, which would forever alter the way companies do business and the way insurance policies are serviced. This could actually harm growers.

Being careful with taxpayer dollars is important. That's why it's about time we look for a way to reduce spending without handcuffing the very people crop insurance was designed to help. And that's where crop insurance agents come in.

We are the middlemen. The people who act as liaisons between companies and farmers. The ones who sit at growers' kitchen tables after disasters to begin picking up the pieces.

This week, as the USDA was considering its latest offering of cuts, the agents offered a common sense solution that would actually put money back into the pockets of both farmers and Uncle Sam.

That proposal-which was outlined in a letter from the Crop Insurance Professionals Association (CIPA) to the American Farm Bureau Federation and leaders of the corn, soybean, wheat, barley, rice, peanut, sugar, and dairy industries-is simple.

Just reduce the premiums that farmers and ranchers pay for insurance. An across-the-board cut would make insurance more affordable for growers, would immediately lower taxpayer costs, and would promote coverage expansion instead of reduction.

Since more than a million policies are written each year worth roughly $80 billion in coverage, the savings would be immense.

The proposal should be a no-brainer, but the USDA doesn't seem too interested. To understand why, look no further than a recent article that appeared in Congress Daily.

Apparently, the government has been making a lot of money on crop insurance with underwriting gains since 2005. Underwriting gains are the profits realized when insurers collect more money on premiums than they pay out in claims.

At $856 million a year, the government has actually made more on underwriting gains than all of the crop insurance companies combined over the past five years.

Reduce premiums across the board and future USDA profits fall too. No wonder the Department has instead focused all of its cost-cutting attention on crop insurers, even though gutting the program's infrastructure could harm growers.

USDA Secretary Tom Vilsack has a clear and painless path forward.

As CIPA stated in its letter to farmers: “USDA could cease further SRA renegotiations and instead lower the premium rates for all producers. The effect of such a step would be to lower producer premiums, while also lowering government costs. This is a straightforward means of achieving savings in delivery costs while helping the producer-the proverbial win-win-win for farmers, taxpayers, and the program.”

It may reduce USDA's unbudgeted, year-end slush fund a little, but it's the right thing to do for taxpayers and farmers.

And trust me, it will mean a lot to the men and women I sit across from at the kitchen table when all else seems lost.

  • About the author: Jordan Roach is a crop insurance agent in Fresno, California. He currently serves as vice chairman of the Crop Insurance Professionals Association, a trade organization of independent agents who run small businesses in small towns from coast to coast.

To return to the News Index page, click: www.agri-pulse.com

#30


Terms of Use | Privacy Policy
blog comments powered by Disqus