SUMMARY OF MISCELLANEOUS TITLE
REFORM
Recommendations In Brief
Improve risk management tools for farmers by creating a supplemental insurance
program. Increase the efficiency and effectiveness of the crop insurance program. Revise
dairy assessment requirements to create a more fair system.
Problem
Risks related to weather patterns and natural disasters are inherent to farming, creating
the need for protection. Crop insurance provides this protection, but farmers have voiced
concern about crop insurance deductibles and premiums being too high.
For example, Ricky from Alabama said, “While most producers realize that no one
should be guaranteed a profit, we do see the need for real crop insurance reform that will
give good business men the tools they need to manage the unique risk involved in
agricultural production…. (crop insurance was) too expensive at adequate coverage, too
many producers were left out, and there was still too much room for fraud.” And Gary
from Kansas agreed, “The crop insurance program definitely needs revamping. Most
insurance programs, such as health or home insurance, reimburse the insured for most of
the costs associated with a tragedy. Crop insurance, in no way, provides this insurance,
and this became very evident with our continued drought here.”
Additionally, certain statutory requirements of the crop insurance program have put its
future integrity and actuarial soundness in question. For example, the law requires no
further adjustments to the standard reinsurance agreement and mandates an expected loss
ratio designed to ensure indemnities paid out exceed premiums paid in.
Crop insurance fraud and abuse continues to be a serious concern. An expansion of
program compliance and data mining activities is needed to appropriately identify and
sanction “bad actors” who are abusing the program. The law also prohibits certain
existing funding sources from being used on high priority crop insurance needs such as
program compliance efforts and research on