Crop Insurance Benefits Ag, Consumers and Taxpayers10/06/2017
The Crop Insurance Professionals Association (CIPA), the only national organization focused solely on Federal Crop Insurance and led solely by agents, offers a few talking points on how the coverage benefits farmers, ranchers, consumers and taxpayers.
In spite of what farm policy critics claim, CIPA insists that crop insurance provides a good value for the cost. Key benefits include:
Success for farmers and ranchers
• Insures 290 million acres, about 90 percent of U.S. planted acres.
• Insures 130 commodities, with 1.1 million policies in 50 states.
• $100 billion in liability protection.
• Claims paid within 30 days.
• Peace of mind for farmers: helps farmers secure credit, invest in their farms, and better market their crops.
• Stabilizes the economies of rural communities, especially during natural disasters.
• Made possible by private sector delivery, including thousands of agents, who are trusted advisors of farmer and rancher customers and jobs creators in rural communities.
Success for taxpayers
• CRS: Saves $10.887 billion more than expected for FY 2014/18.
• 2017 cost of $3.471 is comparable to 2004 cost, and $5.3 billion below estimates.
• Cut $17 billion since 2008, mainly legislative or administrative reductions, including 30 percent cut to administrative and operating costs.
• Farmers paid an average of $3.7 billion the past 10 years in premiums
• Actuarially sound, with a loss ratio of .40 in 2016.
• The improper payment rate is only 2.02 — half of other programs government-wide.
Risk management/liability protection
• Farmers pay premiums year after year, and usually receive no indemnity, with only 19 percent of policies paying an indemnity in 2016.
• Since 1988, crop insurance has covered $15 trillion in liability, while farmers have paid $136 billion in premiums and received $116 billion in indemnities.
CIPA represents agents nationwide, advocating for strong Federal Crop Insurance for America’s farmers and ranchers.
Source: Southwest Farm Press