NCC Raises Concerns Over Crop Insurance Cuts
February 2, 2010 The NCC, along with other agricultural organizations, sent a letter to Agriculture Secretary Vilsack expressing concerns about the proposed cuts in crop insurance.
The Risk Management Agency (RMA) currently is renegotiating the Standard Reinsurance Agreement (SRA) with crop insurance providers. The SRA is the contractual agreement between RMA and the companies that establishes the terms and conditions under which the Federal Crop Insurance Corp. will provide subsidy and reinsurance on eligible crop insurance contracts sold or reinsured by a company.
RMA’s first SRA draft proposed reformulating the companies’ insurance pools and the procedure for receiving their reimbursement of cost to administer the program. These changes would remove approximately $4 billion from the crop insurance program over a five year period.
The letter expressed concerns about the proposed cuts and how those may affect the program’s availability in the future in light of cuts made in the recent farm bill.
Members in both the Senate and House also have joined to send letters to USDA urging RMA not to make deep cuts in crop insurance. In the Senate, Sen. Lincoln (D-AR) and Sen. Chambliss (R-GA), along with 24 other Senators, joined in a letter. In the House, Rep. Conaway (R-TX) and Rep. Herseth-Sandlin (D-SD), along with 36 other Representatives, joined in a similar letter.
RMA plans to complete negotiations on the SRA by early spring. Any changes made in the new SRA would not apply until the ’11 insurance year. The NCC will continue to monitor the negotiations to ensure the viability and availability of crop insurance.
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