USDA: Public-Private Partnership has Strengthened Crop Insurance and Reduced Waste

The current crop insurance system, which depends on cooperation and coordination between private-sector insurers and the U.S. Department of Agriculture (USDA), is working well and serves as an example of how effective such partnerships can be.

That was the message delivered yesterday by Brandon Willis, administrator of the USDA’s Risk Management Agency, 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 percent in 2015, Willis told the group. That’s compared to a 5.5 percent improper payment average for other USDA programs in 2014 and a 4 percent 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 the 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 that 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, noted Willis, 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.”

Source: National Crop Insurance Services

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