FOR IMMEDIATE RELEASE
May 14, 2010

Testimony of Professor Bruce Babcock released in advance of the House Committee on Agriculture hearing scheduled for May 14, 2010, on the 2012 Farm Bill, raised the idea of providing protection to farmers from systemic risk by using an area-based revenue plan. The plan would presumably cover all producers, be 100% subsidized and make a payment when actual county revenue fell below a target county revenue, similar to ACRE. Farmers would use crop insurance to insure their individual risks beyond the risks covered by the area plan.

Professor Babcock’s idea for a county-level ACRE plan has been around for several years and still leaves many conceptual and operational questions unanswered. One question is how to pay for the substantial additional delivery costs involved in simply giving this program to every producer. Farmers consciously make a decision to manage their risks when they choose to participate financially in crop insurance, which is in great contrast to the Professor’s suggestion. Other major issues with area plans are that they don’t protect farmers from individual losses nor do they work well particularly for farmers who do not grow conventional field crops. Certainly, most lenders wouldn’t accept this program as adequate collateral when providing operating loans to farmers. It is also important to recognize that county-based revenue insurance (GRIP) is already available to many producers through the Federal crop insurance program. Whether an existing program, delivered through the private sector and cost-shared with producers, should become a fully subsidized farm program run by the government is very questionable. It is early in the 2012 Farm Bill process and this idea, like some others now surfacing, needs much more evaluation.

FOR IMMEDIATE RELEASE
April 5, 2010

OVERLAND PARK, KANSAS..USDA’s Risk Management Agency (RMA) released late last Friday an update of their disputed Millman study of returns to private crop insurers participating in the Federal Crop Insurance Program. While the report focuses on 2009 earnings, which indeed represent the second highest ever, it is more reflective of record-high crop yields than indicative of the future profitability of the crop insurance industry.

RMA understands too well that conclusions can’t be drawn from data representing such a narrow timeframe. A long-term view is essential when analyzing a program based on a private insurance model, where any year’s returns can vary due to weather or fluctuating crop prices. In fact, when discussing the rating of crop insurance policies in a recent interview, USDA’s Risk Management Agency Administrator William Murphy indicated that a short timeframe is inappropriate when making crop risk-based policy decisions, adding that the analytical horizon had to extend back to the middle 1970’s to ensure the policies were correct.

Corn and soybeans account for two-thirds of crop insurance business. In 2009 these crops each had record-highs in total production. But looking back to as recent as 2008, which was not a disaster year but featured corn and soybean yields close to trend values, RMA reports the rate of return on equity at 12.9%, less than half RMA’s estimate for 2009. If the country had growing conditions in 2009 closer to the severe flood conditions of 1993 or the severe drought conditions of 1988, and crop yields were dramatically below trend values and the return on equity in the crop insurance industry would have been sharply negative with companies losing billions of dollars.

Beyond the obvious concern with using one year of data to judge the financial performance of the industry, RMA’s analytical methods used to estimate rates of return on equity have been challenged by the crop insurance industry and are not a reasonable basis for estimating expected returns to the industry. In fact, Millman itself cautions, “against drawing any strong conclusions on the adequacy or excessiveness of the historical returns.” This is particularly relevant in this case, as their analysis also fails to take into account the $6.4 billion in funds that Congress already cut from the crop insurance program in the 2008 farm bill.

An independent analysis by the firm Grant Thornton compared the profitability of the crop insurance industry to that of the property and casualty industry, an appropriate benchmark for judging financial performance. Over a 17-year period (1992-2008), Grant Thornton found that the Federal Crop Insurance Program is significantly less profitable than the property and casualty industry while having consistently lower expense-to-premium ratios. And while there have been good years, and even very good years like 2009, the public-private crop insurance partnership leverages this period to invest capital and build its reserves so that the program can cover future expected losses.

The Federal Crop Insurance Program is a successful public-private partnership that has become the primary stabilizing force in U.S. farm policy and a key element of the farm policy safety net. And one of the main reasons it has thrived is due to the mandated reserves that invest returns from good years to protect farmers during difficult years. In fact, the companies in the Federal Crop Insurance program are required to hold reserves about twice the amount currently held by the property and casualty insurance sector.

The program has grown from roughly 84 million acres in 1993 to the record year of 265 million acres in 2009. This growth in the size and importance of the program has happened in large measure due to the private delivery system that allows the agents to offer tailored coverage to meet producer’s needs. Crop insurance is essential to making farmers credit worthy and otherwise able to secure loans from banks to operate and modernize their operations. The program has grown also in part because farmers know its value and they can afford to pay the premiums.

The crop insurance industry hopes RMA and others in the policy community will take the proper, longer term view of industry performance. Such a balanced perspective is essential not only to the health and sustainability of the private crop insurers but also to the public-private crop insurance partnership, the foundation of the U.S. farm program safety net today.

National Crop Insurance Services

National Crop Insurance Services National Crop Insurance Services (NCIS) is an international not-for-profit organization representing the interests of more than 20 crop insurance companies. NCIS member companies write Crop-Hail Insurance; Multiple Peril Crop Insurance (MPCI), the federally subsidized risk management program; and, privately developed crop insurance products totaling approximately $9 billion in premium, with liability totaling approximately $80 billion. These companies service all farmers participating in the federal program, including limited-resource and socially-disadvantaged farmers. In partnership with the government, these private companies are the safety net that equitably provides risk management to the American farmer. NCIS members range in size from one-state companies to national writers, as well as foreign company members.

FOR IMMEDIATE RELEASE
February 24, 2010

OVERLAND PARK, KANSAS…Avtar Gill, Gill Insurance, Caruthers, Calif., is the recipient of the Crop Insurance Industry Outstanding Service Award in recognition for outstanding service and outreach to small, limited resource, and socially disadvantaged farmers. Steve Harms, Chairman of the National Crop Insurance Services (NCIS) Board of Directors, and Robert Parkerson, President of NCIS, presented the award at the 2010 Crop Insurance Industry Annual Convention.

Avtar Gill moved from India to the United States in 1980. In 1982 he began his crop insurance career with an agency located in Fresno, California. In 1988 Mr. Gill purchased the entire book of business from this agency, moved his office to Caruthers, California where he formed Gill Insurance. Mr. Gill services each policy in person by scheduling a date and time to meet with his insureds throughout the Southern Tejon area to Northern Redding. He is best known by his colleagues and clients for his extensive knowledge in multiple-peril crop insurance as well as various aspects of the farming industry.

Mr. Gill is an active member of Congressman George Radonovich’s Ag Committee to discuss crucial water and agriculture related issues in the Central Valley. He has also accepted invitations by Senator Barbara Boxer, Congressman Jim Costa and Congressman Devin Nunes to address issues local farmers face today. Mr. Gill is an advocate for the crop insurance, calling Congressman and Senators stressing the urgency of continuing to protect farmers against nature’s disasters.

As well as Gill Insurance, Mr. Gill and his family also own a large farming operation and three retail businesses in Caruthers.

Photo Caption: Presenting the award to Avtar Gill (center) was (left) Robert Parkerson, President of National Crop Insurance Services (NCIS), and, Steve Harms (right), Rain and Hail Insurance L.L.C. and Chairman of the NCIS Board of Directors.

FOR IMMEDIATE RELEASE
January 20, 2010

OVERLAND PARK, KANSAS..The private crop insurance industry today released a proposal for the 2011 Standard Reinsurance Agreement (SRA). The SRA is the contract under which the private insurance companies agree to deliver the federal crop insurance program to the nation’s farm producers.

The industry’s proposal is in response to a proposed 2011 SRA released by the USDA/Risk Management Agency (RMA) on December 4, 2009.  The industry is deeply concerned with RMA’s initial draft of the 2011 SRA and is proposing a number of changes to reduce the highly detrimental impacts of the RMA proposal.

The RMA proposal would substantially change the structure of the crop insurance program, resulting in an estimated reduction in funding of approximately $800 million per year over the next five years. This $4 billion cut is in addition to the $6.4 billion cut mandated by the 2008 Farm Bill.

“These are pretty dramatic cuts based on little or no supporting research and data,” said Bob Parkerson, President of National Crop Insurance Services. “The industry supports thinking about change, but it has to make sense for the Government, industry and producers.”

NCIS, which represents the private companies who sell and service crop insurance policies to America’s farmers and ranchers, presented their comments to the USDA/RMA today.

There are several areas of concern for the industry:

1. Overall funding reductions implied by the draft 2011 SRA are excessive and unacceptable to the industry. Various proposals to reduce Federal spending on crop insurance have been made over the past few years, including the President’s 2010 Fiscal Year budget reduction of $5.2 billion, which was rejected by Congress. Now, through discretionary action, RMA proposes to implement the largest funding cuts ever for the industry.
2. Cuts in payments to deliver the program and in underwriting gains are excessive and will reduce industry returns well below the long-term average, sharply reducing the incentives companies have to maintain investments in the industry in order to adequately service all producers.
3. Severe funding reductions will impair many of the 15 private insurance companies, especially the small and medium-sized ones. This is likely to lead to more consolidation among the already shrinking industry and cause many of the 18,000+ jobs associated with this industry, many in rural America, to be lost.

In addition to the proposed cuts, the private industry has estimated, on a preliminary basis, additional costs of over $100 million to comply with RMA’s new program initiatives and information technology requirements.

1. RMA proposed cuts also apply to the USDA-designated “Underserved States.” The cuts in delivery payments will more than offset the RMA proposed underwriting gain in those 16 states, thus reducing incentives to write and service producers there. Companies already operating in these states have low returns there and would now have a powerful incentive to withdraw. There is no mandate to keep taking losses in these states, thus opening the door to a lack of service in these areas.

“We truly hope that USDA and RMA will be willing to sit down with us soon and go through a true negotiation process for this SRA, “said Parkerson. “The Industry has many good ideas to offer, based on years of analysis, much of it by third party accounting firms. I know we can work this out to the benefit of all interested parties without wreaking havoc with a public/private partnership that has been working the way Congress intended for it to work for the last 30 years.”

The Federal Crop Insurance Program:

The crop insurance industry insures over 272 million acres and protects $90 billion in America’s food supply.  Over 80 percent of the insurable acres are protected.  Crop insurance is the key to financial stability for farmers, enabling farmers and ranchers to supply food and fiber to our country despite severe weather and other challenges that impact their business.

The federal crop insurance program is a public-private partnership, the industry and federal government work hand in hand.  The crop insurance program is available to all producers on an equal basis and provides the financial stability for farmers and ranchers, including access to capital.

National Crop Insurance Services

National Crop Insurance Services National Crop Insurance Services (NCIS) is an international not-for-profit organization representing the interests of more than 20 crop insurance companies. NCIS member companies write Crop-Hail Insurance; Multiple Peril Crop Insurance (MPCI), the federally subsidized risk management program; and, privately developed crop insurance products totaling approximately $9 billion in premium, with liability totaling approximately $80 billion. These companies service all farmers participating in the federal program, including limited-resource and socially-disadvantaged farmers. In partnership with the government, these private companies are the safety net that equitably provides risk management to the American farmer. NCIS members range in size from one-state companies to national writers, as well as foreign company members.

FOR IMMEDIATE RELEASE
October 8, 2009

Independent study by Grant Thornton LLP shows that Federal Crop Insurance Program compares favorably to property and casualty industry

OVERLAND PARK, KANSAS..A study released today by National Crop Insurance Services shows that over a 17 year period (1992-2008) the Federal Crop Insurance Program has been significantly less profitable than the Property and Casualty (P&C) insurance industry, is riskier than the Property and Casualty industry, and has consistently lower expense-to-premium ratios.

The analysis is the 2009 update of a study originally prepared in 2007 to respond to a critical report released by the General Accountability Office (GAO). The Multiple Peril Crop Insurance (MPCI) program is a public-private partnership jointly managed by 15 designated private companies and the Risk Management Agency (RMA) of the United States Department of Agriculture (USDA).

“One of the key elements of the analysis was that crop insurance averaged 14.2 percent per year in pre-tax net income over the period 1992-2008 whereas the property and casualty industry saw an average annual profitability of 17.5 percent,” said Robert Parkerson, President of National Crop Insurance Services, a trade association for the industry. Moreover, the report concludes that providing MPCI coverage entails greater risk than P&C.

The Grant Thornton update also addresses the issue of administrative and operating (A&O) expense reimbursements. Unlike P&C insurance, MPCI premiums do not include the insurer’s cost of delivering the program. Instead, MPCI program delivery costs are compensated by the Federal government via an A&O reimbursement paid on behalf of farmers. Under the arrangement with the RMA, MPCI companies expect to receive full reimbursement for their A&O expenses. However, in 2008, total expenses equaled 22.1 percent of gross premiums while A&O reimbursements totaled only 20.4 percent, resulting in a shortfall of $160.8 million. The report also examines the impact of further cuts in A&O reimbursements imposed by the 2008 Farm Bill effective for the 2009 year and discusses aspects of the legislation which will result in delayed reimbursement of A&O and underwriting gains starting in 2011 and 2012.

The study also compares the expense ratios of the MPCI program to those of the P&C industry. In each of the past ten years, the total expense to gross premium ratio for the MPCI program has been under 29 percent. For the past three years, the expense ratio has been under 25 percent, reaching a record low of 22.1 percent in 2008. Expense ratios for MPCI are substantially less than expense ratios for the P&C industry when put on a comparable basis.

The Risk Management Agency recently released a report prepared by Milliman, Inc., on the historical rate of return of the crop insurance program. “Once we have had an opportunity to thoroughly review the findings from that study and compare it to the results of the Grant Thornton report, we will release our analysis and provide more information to the public,” said Parkerson.

At this time, the private insurance companies and the Risk Management Agency are in the initial stages of renegotiating the Standard Reinsurance Agreement, which provides the financial framework for the private industry’s participation in the program. RMA’s financial integrity provisions impose stringent surplus requirements on MPCI companies. These requirements ensure that adequate resources will be available in the event of extreme or catastrophic weather events. With the additional regulatory oversight at the state level, the Federal crop insurance program is one of the most regulated insurance programs in the world. “The crop insurance industry is on strong financial footing, and we would like it to remain that way” said NCIS President Bob Parkerson. “Crop insurance is at the center of the farm economy – a strong crop insurance program benefits a much broader community than just farmers and ranchers. If you appreciate the low cost of food in this country, you can thank the crop insurance industry for bringing some stability to America’s agricultural industry,” added Parkerson.

NCIS is an international non-profit organization representing the interests of the private insurance companies that provide crop insurance and risk management tools to America’s farmers and ranchers.

FOR IMMEDIATE RELEASE
July 20, 2009

OVERLAND PARK, KAN…The results are all but final…a record $8.6 billion in crop insurance indemnity payments were made to U.S. farmers for losses in 2008 because of droughts and flooding in parts of the country along with substantial price declines for some of the majority commodities.

“This was one very busy year for the industry,” said Bob Parkerson, president of National Crop Insurance Services (NCIS), the nonprofit industry trade association in Kansas City.  “Most of the claims came in late in the year because of the drop in commodity prices, but the private companies worked hard to process and pay many of them within just weeks after the loss was filed.”

The good news for taxpayers is that the lion’s share of those payments comes from the private insurance companies that sell and service the Federal crop insurance program.

“Crop insurance is key to keeping farmers financially stable during difficult times,” said Parkerson.  “And the private companies will be there to offer that protection in the good and bad weather years.”

There were several states whose farmers were paid significant indemnities, helping to support the rural communities in which they live.  Among those were: Illinois ($569 million); Indiana ($524 million); Iowa ($1.1 billion); Kansas ($411 million); Minnesota ($691 million); Nebraska ($414 million); North Dakota ($842 million); Ohio ($522 million); South Dakota ($400 million); and, Texas ($766 million).

“This is one of those years that demonstrates just how well the public/private partnership between USDA and the crop insurance industry works,” said Parkerson.

The “partnership” was legislated in 1980 when relatively few farmers used crop insurance to manage their risks.  More than 272 million acres, about 80 percent of the insurable acreage, were protected by crop insurance in 2008.

FOR IMMEDIATE RELEASE
May 8, 2009

OVERLAND PARK, KAN…The crop insurance industry has paid over $512 million to the farmers in Indiana for losses due to crop loss or decrease in commodity prices for 2008, according to the most recent summary of business data released by the Risk Management Agency.

“The amount of indemnities paid may still continue to rise,” said Robert Parkerson, president of National Crop Insurance Services, a trade association for the crop insurance industry. “Not all losses have been paid yet because the Risk Management Agency just recently released the prices for the GRIP policies, and many still need to be finalized and paid.”

The private insurance industry has had thousands of adjusters working these losses since crops were harvested, and won’t quit until the last loss is processed.

“Farmers in Indiana should be able to rest better knowing that crop insurance is protecting their hard work and investment,” Parkerson continued. “And the people in the rural communities where they live should be relieved that these farmers are able to stay in business because they planned ahead and bought crop insurance.”

The good news for taxpayers is that the lion’s share of those payments comes from the private insurance companies that sell and service the Federal crop insurance program. For their part, the private insurance companies have contributed substantially from the funds they set aside as loss reserves.

In total, the crop insurance industry has paid out over $8.5 billion in losses for 2008 nationwide.

FOR IMMEDIATE RELEASE
May 8, 2009

OVERLAND PARK, KAN…The crop insurance industry has paid almost $396 million to the farmers in South Dakota for losses due to crop loss or decrease in commodity prices for 2008, according to the most recent summary of business data released by the Risk Management Agency.

“The amount of indemnities paid may still continue to rise,” said Robert Parkerson, president of National Crop Insurance Services, a trade association for the crop insurance industry. “Not all losses have been paid yet because the Risk Management Agency just recently released the prices for the GRIP policies, and many still need to be finalized and paid.”

The private insurance industry has had thousands of adjusters working these losses since crops were harvested, and won’t quit until the last loss is processed. “Farmers in South Dakota should be able to rest better knowing that crop insurance is protecting their hard work and investment,” Parkerson continued. “And the people in the rural communities where they live should be relieved that these farmers are able to stay in business because they planned ahead and bought crop insurance.”

The good news for taxpayers is that the lion’s share of those payments comes from the private insurance companies that sell and service the Federal crop insurance program. For their part, the private insurance companies have contributed substantially from the funds they set aside as loss reserves.

In total, the crop insurance industry has paid out over $8.5 billion in losses for 2008 nationwide.

FOR IMMEDIATE RELEASE
May 8, 2009

OVERLAND PARK, KAN…The crop insurance industry has paid over $763 million to the farmers in Texas for losses due to crop loss or decrease in commodity prices for 2008, according to the most recent summary of business data released by the Risk Management Agency.

“The amount of indemnities paid may still continue to rise,” said Robert Parkerson, president of National Crop Insurance Services, a trade association for the crop insurance industry. “Not all losses have been paid yet because the Risk Management Agency just recently released the prices for the GRIP policies, and many still need to be finalized and paid.”

The private insurance industry has had thousands of adjusters working these losses since crops were harvested, and won’t quit until the last loss is processed.

“Farmers in Texas should be able to rest better knowing that crop insurance is protecting their hard work and investment,” Parkerson continued. “And the people in the rural communities where they live should be relieved that these farmers are able to stay in business because they planned ahead and bought crop insurance.”

The good news for taxpayers is that the lion’s share of those payments comes from the private insurance companies that sell and service the Federal crop insurance program. For their part, the private insurance companies have contributed substantially from the funds they set aside as loss reserves.

In total, the crop insurance industry has paid out over $8.5 billion in losses for 2008 nationwide.

FOR IMMEDIATE RELEASE
March 16, 2009

OVERLAND PARK, KAN…The crop insurance industry presented a check for over $2,500 to the Hidden Harvest charity located in the Coachella Valley in southern California. The money was raised during the crop insurance industry’s annual convention in February.

(Left to right) Randy Tronnes, Rural Community Insurance Services, Chairman of the NCIS Board of Directors; Christy Porter, Hidden Harvest; Bob Parkerson, President of National Crop Insurance Services; and, Sherri Scharff, National Crop Insurance Services.

“We were very pleased with the generosity of the members of our association to give to such a great organization,” said Bob Parkerson, president of National Crop Insurance Services, one of the trade associations co-sponsoring the annual convention. “It was the first year we have done something like this during our event, but I think it’s definitely something we’ll continue to do in the future.”

Hidden Harvest’s mission is to glean or “rescue” produce from Coachella Valley fields and packing houses. The Valley is one of the largest agricultural regions in the nation yet few people realize that millions of pounds of nutritious, locally-grown produce are left behind after the harvest is complete.

Hidden Harvest is the only organization in the country that pays low-income, experienced farm workers to glean fields. The food is given to more than 60 agencies that serve the poor. In addition, Hidden Harvest educates the media and public about hunger and nutrition issues, provides cooking classes so people learn how to prepare the food they are given, and run a non-perishable food bank serving an average of 1,200 families a month.

“We can’t thank you enough for your generous contribution,” said Christy Porter, founder and director of Hidden Harvest, told the attendees at the annual convention. “This will go such a long way in continuing the work we do at Hidden Harvest and helping the people of the Coachella Valley.”

Crop insurance helps make America’s farmers and ranchers world leaders in agriculture, allowing producers to stay competitive and be more innovative. Sixteen private crop insurance companies provide this important risk management tool to agricultural producers throughout the United States and abroad.

FOR IMMEDIATE RELEASE
February 18, 2009

OVERLAND PARK, Kan — Judy Anderson, Rural Community Insurance Services, was presented with the Crop Insurance Industry Leadership Award at the 2009 Crop Insurance Industry Annual Convention. This award is given to individuals who are directly involved in the Crop Insurance Industry and who consistently serve the Industry by providing outstanding leadership.

Mrs. Anderson has been involved in the MPCI program in excess of 44 years, first working with the Federal Crop Insurance Corporation and later moving to the private industry side of the business. She has been responsible for developing operating procedures for the Rural Community Insurance Services headquarters and the RCIS Sales and Service Offices, as well as handling day-to-day operations. The MPCI program is extremely paper intensive and Mrs. Anderson has been involved in developing technology solutions to streamline processes that have led to MPCI premium and liability being booked in a fast and efficient manner; a valuable service to both agents and producers.

As we all know, the MPCI program involves many complex federal rules and regulations, as well as many procedures that must be followed by all those involved in the business. Mrs. Anderson’s knowledge, experience and common sense have helped many RCIS employees and agents succeed in this challenging environment. Her knowledge of MPCI has assisted many others as she has been known as one of the people to go to with questions on policy and procedure.

Throughout the course of her career, she has testified on behalf of the crop insurance industry before the U.S. Senate. In addition, she has served on the NCIS MPCI Actuarial and Statistical Committee, has chaired the NCIS Training Committee, and has been a member of the NCIS Product Development Committee.

Photo Caption: (left to right) Robert Parkerson, President, National Crop Insurance Services; Judy Anderson, Rural Community Insurance Services; and, Randy Tronnes, Rural Community Insurance Services and Chairman of the NCIS Board of Directors.

FOR IMMEDIATE RELEASE
February 17, 2009

March 16 is the deadline for farmers across the country to buy crop insurance on many spring planted crops. It is especially important this year because eligibility for federal crop disaster aid is now dependent upon having crop insurance.

Any producer who wants to be eligible for the new federal Supplemental Revenue Assistance Program (SURE) in 2009 must buy crop insurance coverage on their insurable crops. SURE is the provision of the 2008 Farm Bill designed to replace ad hoc disaster assistance programs.

March 16 is also the deadline for making any changes to existing crop insurance policies.

Some of the crops that share the March 16 deadline are: corn, soybeans, wheat, oats, forage seeding, and many varieties of fresh and processed vegetables.

Which crops are insurable and what kinds of policies are available vary from state to state and county to county. To make sure you are eligible for SURE contact a crop insurance agent well before the March 16 deadline.

Data presented in this article was provided by the USDA’s Risk Management Agency

National Crop Insurance Services (NCIS) is a nonprofit trade association representing all of the private insurance companies who sell and service Federal crop insurance policies.

FOR IMMEDIATE RELEASE
January 8, 2009

Member-supported site will provide a resource to producers, government officials, journalists and those in the agricultural community

OVERLAND PARK, Kan — National Crop Insurance Services, a trade association for the crop insurance industry, has launched a new website. The URL is: www.ncis.staging.wpengine.com

The website is part of a new effort spearheaded by NCIS to provide information to the public and to decision-makers and key influencers about the benefits and importance of the Federal crop insurance program.

“We have a great story to tell and the website is a terrific way to put a lot of information in one place,” said Robert Parkerson, President of National Crop Insurance Services.  “We have found that while producers and those familiar with the agricultural economy understand the value of a strong crop insurance program, average citizens and many elected officials really do not know enough about how crop insurance works or why it is so essential to the farm economy,” Parkerson added.

The site contains information about the history of the crop insurance program and how it works; provides video segments from individuals who have had experiences with the program; shows the growth of the program over time and directs visitors to the 16 private companies that provide coverage across the country.  Visitors to the website will be also able to “sign up” to show their support for the crop insurance program, and are given the opportunity to submit questions or comments about the program.

The site also has news stories, press releases, reports, testimony and other documents of interest.   There are links to the USDA’s Risk Management Agency (RMA) and to NCIS member companies.  The website will be kept up-to-date with current and relevant information about the crop insurance program as it changes.

“In the 1990s, Congress challenged the industry to increase participation in the crop insurance program.  Working with the USDA, the industry met that challenge.  We now see 80 percent of the farmland in the US covered by the federal crop insurance program,” said Dr. Keith Collins, former chief economist for the USDA and former Chairman of the Board of Directors of the Federal Crop Insurance Corporation. “The crop insurance program provides an essential underpinning to the nation’s farm economy,” Collins added.  Dr. Collins is currently serving as a consultant to National Crop insurance Services.

Under the Federal crop insurance program’s unique public-private partnership, 16 private companies are currently authorized by RMA to write policies. The private companies are obligated to sell insurance to every eligible farmer who requests it and must retain a portion of the risk on every policy.  The Federal crop insurance program covered $90 billion of crops in 2008, insuring more than 100 individual crops on more than 271 million acres.

“We want to make sure that policymakers in Washington understand that our industry is at the center of the farm economy.  A strong crop insurance program benefits a much broader community,” said NCIS President Bob Parkerson.  “Our new website is a great resource for those who want to learn more and stay informed about the issues that affect crop insurance.  Please take a look,” Parkerson added.

The website can be accessed through www.ncis.staging.wpengine.com

FOR IMMEDIATE RELEASE
August 11, 2008

OVERLAND PARK, Kan — Any producer who wants to be eligible for disaster assistance on 2009 summer crops must have crop insurance coverage on all insurable fall planted crops before the sales closing deadline (September 30, 2008 for winter wheat, barley, and forage production for instance.)

The new Farm Bill requires crop insurance, on all acres of any insurable crop, or Noninsured Assistance Program (NAP) coverage on all acres of uninsurable crops, in order to be eligible for the Supplemental Revenue Assistance Program (SURE).

If you fail to sign up for crop insurance on your fall planted crops you will not be protected under SURE for your corn and soybeans next summer, even if you buy crop insurance for those crops.

The more crop insurance coverage you have, the more your SURE guarantee will be.

Authorized in the Farm Bill, SURE is effective for the 2008 crop year and runs through the 2011 crop year. SURE will be based on whole farm revenue. It will be triggered by a USDA Secretarial disaster declaration for a county. Contiguous counties are automatically eligible.

It will also be available to any farm where, during the calendar year, the total loss of production on the farm, because of weather, is greater than 50 percent of the normal production on the farm.

For insured crops, the SURE guarantee is 115 percent times the crop insurance price election times the crop insurance coverage level times the adjusted crop insurance yield. Crop insurance coverage levels will determine the size of the guarantee.

Some of the more common fall planted crops with the September 30 deadline include: winter wheat, oats, barley, rye, and forage production.

SURE is Major Shift from the Past
According to Art Barnaby, Kansas State University, growers’ ad hoc disaster aid used to be based on 65 percent coverage regardless of their crop insurance coverage, including the minimum Catastrophic coverage (CAT). That aid was also based on individual crops by county.

“The SURE program is a whole farm revenue guarantee and is based on the crop insurance coverage selected by farmers. Those who only select CAT coverage will have their SURE coverage based on 50 percent coverage at the 55 percent price. However, farmers insuring at the 75 percent level will have their SURE disaster aid based on 75 percent coverage at 100 percent of the price election,” Barnaby said.

If no crop insurance is available for your crop you must obtain Noninsured Assistance Program (NAP) coverage from the Farm Service Agency (FSA).

According to Barnaby, there are two limits on the SURE payments.

The per farm SURE cap equals 90 percent of expected revenue. The whole farm revenue to count plus SURE payments cannot exceed 90 percent times planted acres times adjusted actual production history yield (used to set crop insurance yields) times “insurance price guarantee.”

The price is expected to be the national average USDA price for the marketing year that follows. So there will be a long wait for a SURE payment compared to when crop insurance loss payments are received.

The other limit to SURE is a maximum payment amount of $100,000. Most farmers will have a $200,000 payment limit because a spouse also qualifies for a $100,000 payment limit.

Assure Your Eligibility
If you want to maintain your eligibility for disaster aid in 2009 you must sign up for crop insurance coverage on every acre of every insurable fall planted crop before the September 30, 2008 deadline.

If you have any questions, contact a crop insurance agent well before the deadline.

NCIS is a non-profit trade association representing the private crop insurance industry. Funding for the development of this release was provided by the USDA Risk Management Agency as part of a cooperative agreement with NCIS.