Federal Crop Insurance - A "Bedrock" Program
December 19th, 2006 by David Graves
In 2005, we celebrated the 25th anniversary of the Federal Crop Insurance Act of 1980, which created the unique partnership within the crop insurance program between private insurance companies and the Department of Agriculture (USDA). Over this time, crop insurance has grown to become an integral part of farming. In fact, many farmers use the program as the centerpiece of their risk management planning. Evidence suggests the program is working for a vast majority of America’s farmers and USDA routinely reports to Congress that changes provided by the Agricultural Risk Protection Act (ARPA) that was signed into law in mid-2000 has made the program even more popular and a more useful risk management tool.
In a crop insurance status report to a House Agriculture Subcommittee in March 2006, Keith Collins, Chairman of the Board of the Federal Crop Insurance Corporation (FCIC) as well as USDA’s Chief Economist, and Eldon Gould, Administrator, Risk Management Agency (RMA), gave testimonies that indicated for the 2005 crop year there were 1.2 million Federal crop insurance policies in force with a liability of $44 billion. That is up 30 percent from the liability in 2000, the last year before ARPA was enacted. These policies covered 246 million acres and that was up 20 percent from the year 2000.
With this history of proven performance and acceptability by America’s farmers, the current Federal Crop Insurance Program should not be replaced or changed during consideration of the 2007 farm bill, except as to continue making real improvements. As Congress considers some proposals that would radically change farm income support programs, it should take care not to diminish this crop insurance program that so many thousands of American farmers have come to rely on.
Your thoughts are welcome.
Pat thomas Says
As i listen to the farmers in my area talk about their farm plans and marketing schemes I hear terms i would have never heard even 5 years ago. Terms like APH and Guarentee. this is an example of the acceptance of the Federal Crop program bny the end user. It would indeed be a shame to water this program down in anyway at a time when farmers in the corn and wheat belt have a chance to show some positive results
Dec 21st, 2006 at 5:16 pm
Dee Lohse Says
I too have seen farmers come to rely on their federal crop insurance as a major factor in their risk management program. Even though crops have been better the last 4 years in our area, farmers still remember how well the program worked for them when production was down significantly, and they believe in the product. They realize that they will never make money in a crop insurance situation, but they also know that crop insurance can be the difference between farming and not farming. They understand the program better and work harder to comply with the rules and requirements. They are concerned about abuse in the program and “a few” ruining the program for the rest of them. I hope we will stay committed to encouraging farming in this country.
Dec 22nd, 2006 at 11:03 am