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Crop insurance budget cut proposal draws criticism
An official of the American Association of Crop Insurers thinks there is an ulterior motive to the Obama administration’s proposal to cut another eight billion dollars from the federal crop insurance program.
“We don’t think it’s based in any kind of analytical reality,” says David Graves, manager and secretary of the crop insurers’ organization, “and is therefore just simply a political statement by the Administration wanting to whack private sector delivery and private sector jobs—possibly looking to have those jobs moved back to the government.”
The crop insurance program saw a six billion dollar budget reduction in the 2008 farm bill and another six billion dollar cut in the Standard Reinsurance Agreement of 2010. Graves says the latest proposed budget cut would likely lead to further consolidation of crop insurance companies and agencies.
“There is a type of a consolidation going on that leaves competition fairly fragile,” he says. “We think another eight billion—it might not even take that much—but certainly the Administration proposal, if it was implemented, would, we think, generate further change in industry structure and ownership.”
The administration’s proposal has been roundly criticized by farm state lawmakers.
AUDIO: David Graves (14:26 MP3)
Tags: Crop insurance, USDA
I HAVE BEEN A CROP INS. AGENT FOR 19 + YEARS, IN ALL THE CUTS THAT DIRECTLY AFFECT ME AND MY AGENCY IS THIS LAST SRA AGREEMENT CUT; I AT THIS TIME HAVE LOST 12% OF MY COMMISSION FOR THE 2011 CROP YEAR WHICH AMOUNTS UP TO ABOUT $40,000.00 + THIS YEAR; SO IN TURN I HAVE HAD TO REDUCE MY STAFF BY ONE, I DON’T BELIEVE THE PRESIDENT OR THE CONGRESS UNDERSTANDS THE ROLL THAT THE AGENT PLAYS IN THIS INDUSTRY, CROP INSURANCE IS A COMPLEX PROGRAM WITH LAWS, AND REGULATIONS IF NOT PROPERLY ADHEARED TOO WILL AND DOES AFFECT THE FARMERS, WE AS AGENTS DO MUCH MORE THAN SELL THE POLICY, WE MAKE SURE THE FARMERS ARE KEPT ABREAST OF ALL CHANGES AND CURRENT REG. IN COMMON TERMS AS THEY APPLY TO THE FARMING OPERATIONS. OTHERWISE THE FARMER COULD BE DENIED A CLAIM, AND SINCE THE CROP INS. LIABILITY AND COST IS BASED ON THE FARMERS PRODUCTION HISTORY, WE AS AGENT RECEIVE THOSE PRODUCTION AND ACREAGE REPORTS WE AUDIT THEM AND SUBMITT THEM TO THE AIP’S; IF WHAT WE REPORT IS INCORRECT THEN THEIR AGAIN THE FARMER COULD BE DENIED A CLAIM; THE FARMERS LENDERS REQUIRE THEM TO CARRY CROP INS. WE AGAIN AS AGENT SUPPLY THE NEEDED INFORMATION AND DOCUMENTS SO THAT THEY CAN COMPLY WITH THEIR LENDERS AND GET THE NEEDED FUNDS; THEIR ARE MANY UNINSURABLE PRACTICES THAT WOULD CAUSE A CLAIM TO BE DENNIED HOW ELSE OTHER THAN A TRAINED CROP INS. AGENT WOULD OUR FARMERS BE ABLE THE ADMINSTER THIS PROGRAM TO THEM SELVES.AS AN AGENT, I TAKE MY RESPONSIBILTY SERIOUSLY, I HAVE A DIRECT IMPACT ON THE FARMING INDUSTRY LIVELY HOOD; THE ACTUAL FARMER THEMSELVES ARE NOT GETTING RICH FROM CROP INSURANCE, AND CROP INSURANCE DOES NOT PAY 100% OF A FARMERS LOSS; AFTER THIS LAST CUT MANY AGENTS ARE LOOKING FOR OTHER EMPLOYMENT, AND DOING CROP INSURANCE ON THE SIDE, AND UNLESS THESE AGENTS ONLY HAVE A FEW INSURED, SOMETHING IS GOING TO COME UP SHORT; EITHER WASHINGTON DOESN’T UNDERSTAND THE ADMINSTRATION OF CROP INSURANCE PROGRAMS, OR THEY DON’T CARE; NOT ONLY DOES THESE CUTS AFFECT THE FARMERS, BUT ALSO THE AIP’S AND THE AGENT, WHEN WE GET CUT THEN YOU CAN BELIEVE THAT WE HAVE TO MAKE CUT IN OUR EMPLOYEES;