Industry Leaders Tout Crop Insurance Benefits at Senate Hearing
Crop insurance industry leaders testified today before U.S. Senators, stressing the vital role crop insurance plays in providing risk management to farmers across the country.
Their testimony was part of the Senate on Agriculture, Nutrition and Forestry hearing, “Commodities, Credit, and Crop Insurance: Perspectives on Risk Management Tools and Trends for the 2018 Farm Bill.”
Ron Rutledge, president and CEO of Farmers Mutual Hail Insurance Company of Iowa, emphasized the breadth of the protection that is provided by crop insurance in his testimony, noting that protection is available on more than 100 different crops in all 50 states, including rapid growth among specialty crops.
Rutledge reminded the Committee that crop insurance policies must be purchased by farmers and only pay an indemnity when producers face a verifiable loss above and beyond their deductible. Yet, despite the critical role crop insurance plays in providing fiscally responsible protection to farmers, crop insurance will face attacks during the 2018 Farm Bill process.
“I would like to point out, however, that on average over the last five years, 54 percent of Farmers Mutual Hail’s customers paid premiums out of their own pockets and received zero indemnity payments…That’s how insurance is supposed to work,” Rutledge told lawmakers.
Rutledge called on the Committee to continue their support for the private-sector delivery of crop insurance and for affordable and effective crop insurance for producers of all sizes, crops and regions.
Specifically, he asked that Congress oppose efforts to harm crop insurance in the 2018 Farm Bill, including cuts to the private-sector delivery of crop insurance, reductions to premium discounts, and arbitrary means testing participation.
William Cole, chairman of Crop Insurance Professionals Association, also testified before the Committee, applauding the work of the Committee Chairman Pat Roberts (R-KS), who authored the Agricultural Risk Protection Act of 2000. Since then, participation in crop insurance has doubled and costly, un-budgeted disaster bills have become a thing of the past.
“The Chairman’s work is largely responsible for the success story of federal crop insurance, which today insures 90 percent of all U.S. planted acres, 290 million acres in all, with $100 billion in liability protection in force today. Thank you, Mr. Chairman, for all you have done for America’s farmers and ranchers by ensuring that they have access to something as basic as insurance, which most Americans simply take for granted,” Cole testified.
Cole noted that in addition to benefitting farmers and taxpayers, crop insurance has consistently come in under budget. Since the 2008 Farm Bill, crop insurance has yielded $17 billion in savings and is on target to save taxpayers another $6.7 billion over the next 10 years, he said.
Cole asked lawmakers to consider three key principles while debating the 2018 Farm Bill: that the current Farm Bill is below budget; that crop insurance is critical and gives taxpayers a big bang for the buck; and that farmers have a strong “Title 1,” or non-insurance components of the safety net, for times of depressed markets.
In addition to Rutledge and Cole’s oral testimonies, The Independent Insurance Agents & Brokers of America (IIABA or the Big “I”), the nation’s oldest and largest national trade association of independent insurance agents, provided a written statement to the Committee.
IIABA urged Congress not only to reject any attempts to cut or cap the budget for crop insurance, but to expand the role of the federal crop insurance program, and to continue its commitment to farmers and ranchers across the country.