Four Reasons for Crop Insurance Program Success
January 17th, 2007 by David Graves
The Federal Crop Insurance Program has succeeded due, in large measure, to the consistent application of the following four fundamental characteristics:
- The federal crop insurance program is a unique public-private partnership that combines the financial resources of the federal government with the operating efficiency of private sector insurance companies, reinsurers and thousands of crop insurance agents over the country.
- The program is based on service competition.
- The program is based on universal availability.
- The program is based on non-discrimination.
In other words, the current crop insurance program works because it strikes a good balance between and among several important factors, including government resources, government regulations, private sector initiative, private sector ingenuity and public policy objectives. The program has had the proper incentives for companies and agents to serve all farmers, regardless of size and location. The private sector delivery system has traditionally had incentives as well as a mandate to offer all farmers the best possible risk management advice.
The top priority of this public/private crop insurance partnership must be to further build on these critical reasons for the program’s success to help assure maximum risk management value and service accrues to America’s farmers, ranchers and growers.