Crop Insurance Cost Getting Job Done
May 2nd, 2007 by David Graves
Some reports raise questions about certain aspects of the cost of the modern federal crop insurance program. Federal cost of the program includes funds to pay a portion of the farmers’ premium amount for each policy and funds to pay approved insurance providers’ (AIPs) total expenses for selling and servicing policies. Therefore, in general, increased federal cost of the program reflects implementation of congressional intent to expand and enhance coverage of farmers across the nation.
The congressional objective has been to have a federal crop insurance program that is an efficient and effective production agriculture risk management tool equally and universally available to all farmers across the nation. Therefore, premium support cost will always be consistent with the level of farmer participation in the program. To the degree that the congressional objective is more fully satisfied, meaning more farmers participating and purchasing more protection, premium support cost increases.