Since the renegotiation of the Standard Reinsurance Agreement in 2010, private crop insurance company returns have significantly decreased, says a new study by the National Corn Growers Association (NCGA). Current returns are inline with standard established by the USDA’s Risk Management Agency, averaging around 1.5 percent- a decrease of 12.6 percentage points.
“The federal crop insurance program is the cornerstone of farm bill risk management programs, and it is more important than ever given the state of the farm economy,” said Steve Ebke, chairman of the NCGA Risk Management Action Team and a farmer from Daykin, Nebraska. “We commissioned an independent analysis of the crop insurance industry’s performance to determine whether criticisms against the insurers’ returns have merit. What we discovered is that the returns private crop insurance companies receive are much smaller than opponents claim, and they are well within the standards set by RMA.”