The current crop insurance system, which depends on cooperation and coordination between private-sector insurers and the U.S. Department of Agriculture, is working well and serves as an example of how effective such partnerships can be. That was the message Brandon Willis, administrator of the USDA’s Risk Management Agency (RMA), delivered Monday at the crop insurance industry’s annual meeting.
Willis pointed to the partnership’s track record for eliminating waste, fraud and abuse as proof of its success.
Occurrences of improper indemnity payments to farmers, which can result from data entry and reporting mistakes, fell to 2.2% in 2015, Willis told the group. That’s compared to a 5.5% improper payment average for other USDA programs in 2014 and a 4% average for programs across all government agencies.
“This demonstrates that the crop insurance program can withstand the scrutiny (from its critics),” Willis explained. “It’s a good story. It tells the story that crop insurance is a well-run program with an error rate far below the government average.”
He added that USDA and private insurers will continue to identify and address the causes of errors and constantly make improvements to the system.
In addition to efficient and accurate program management, Willis said the partnership excelled in implementing a complicated farm bill in 2014. In particular, he noted how hard work by both the public and private sectors made it possible to expand coverage options to beginning farmers and ranchers, organic production and specialty crops.
This expanded coverage has helped crop insurance find new supporters, Willis noted, which will be essential to defending farm policy in the future.
“It’s important that we have a safety net that works for everybody,” he concluded. “Crop insurance has worked, ... and it is my hope that we can work together … to have a program that we are proud of and that farmers are proud of.”
Roberts called for defending crop insurance
Also at the meeting, Sen. Pat Roberts (R., Kan.), chairman of the Senate Agriculture Committee, pledged to “preserve, protect and defend” this public/private partnership against the challenges ahead. Roberts praised the ability of the industry to work together to stave off cuts to crop insurance that were included in last year’s budget deal, noting that agriculture can be a powerful force when it is united.
“I’m proud of the way we all stood up and found a solution,” Roberts said, adding that by working with House Agriculture Committee chairman Michael Conaway "and what was nearly the entire agriculture industry, we were able to fix a shortsighted legislative cut to crop insurance.”
He also warned that more teamwork will be needed in the days ahead as critics continue to attack this important risk management tool. Additionally, Roberts encouraged crop insurers to double their outreach and education efforts, stating that not all lawmakers in Washington, D.C., understand farm policy.
“My challenge to you today is to find more allies — leave no stone unturned,” Roberts said. “We have to increase the number of voices defending crop insurance both inside the Congress and out in the countryside.”
Roberts explained that he has spent his career working to improve the reach and mechanics of crop insurance while helping to move farm policy away from unbudgeted ad hoc disaster assistance. The 2014 farm bill made the most significant changes to reach more producers and commodities than ever before.
“We should all be proud that crop insurance has grown into the number-one risk management tool for the majority of farmers and ranchers across this great country,” Roberts added. “Let’s keep their toolbox full so they can manage risks on their own operation, stay in business and pass the farm onto the next generation.”