Changes have been proposed that will improve producer access to crop insurance. USDA's Risk Management Agency has released a second draft of a proposed new Standard Reinsurance Agreement, which establishes the terms, roles, and responsibilities for both USDA and insurance companies that participate in the Federal Crop Insurance Program. The new draft includes a series of significant changes, including many discussed during negotiations between the RMA and the participating crop insurance companies.
Due to significant increases in commodity prices in recent years, annual insurance industry payments more than doubled from $1.8 billion in 2006 to an estimated $3.8 billion in 2009. At the same time, the number of policies decreased. Ag Secretary Tom Vilsack says the proposal represents a significant step toward an agreement that will give us a stronger Federal crop insurance program that helps producers manage risk, reduces volatility for crop insurance companies and serve farmers in every region of the country.
RMA Administrator William Murphy says that as with the first draft of the SRA, the second draft provides companies with relatively stable administrative and operating subsidies per policy for seven major commodities and will facilitate insurance company planning.