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Published May 14, 2012, 09:05 AM

Don't turn back the clock on crop insurance

ALEXANDRIA, Va. — Congress is currently working on legislation that could lead to big changes in federal crop insurance and have major effects on America’s farmers.

By: Mike Becker, Agweek

ALEXANDRIA, Va. — Congress is currently working on legislation that could lead to big changes in federal crop insurance and have major effects on America’s farmers.

As part of this process, our federal legislators are listening intently to the views of their constituents about how to make this program more efficient and better serve the country. However, if one group has its way, it would take the program back decades, to a time of inefficiencies, overspending, and near failure by replacing, in part or in whole, professional private-sector crop insurance agents with federal government employees.

The National Association of Professional Insurance Agents (PIA National) is strongly opposed to this effort because it would be detrimental to the federal crop insurance program and the farmers who the program serves.

The National Association of Farm Service Agency County Office Employees is an organization that represents Farm Service Agency employees. NASCOE has been engaging in an active lobbying campaign urging federal regulators and legislators to remove private-sector insurance agents from crop insurance and replace them with FSA employees, which would be a terrible move. But don’t take my word for it; history speaks for itself.

Private sector partnership

The federal government sold crop insurance until nearly 30 years ago. Because the program was unsuccessful under direct federal involvement, Congress decided to partner with the private sector. Farmers were given a choice of dealing with a government employee or a private-sector crop insurance agent. Farmers at the time nearly abandoned the federal government option and purchased their crop insurance through the private sector. The federal option quickly was phased out.

Since then, crop insurance has enjoyed extensive growth. Insurance agents have been a key to this growth and the increasing success of the program, including being instrumental in insuring a record breaking 264 million acres in the 2011 crop year, during which more than $10 billion of indemnity payments were made to farmers. This level of success would have been unfathomable 30 years ago when the federal government was delivering this coverage, and not doing it well.

Arguments that turning the clock back three decades to a time when federal government employees were in charge would lead to greater efficiency and better customer service to farmers strain credibility. They also are in conflict with the historical facts.

Licensed crop insurance agents are highly skilled individuals who provide stellar performance by educating farmers on the program, comparing coverages, tailoring policies, as well as reviewing and updating unit structure, actual production history, yield and coverage levels. This just touches on the role of an agent and doesn’t even consider their full array of responsibilities and value brought to the ultimate customer, the farmer. Crop insurance has changed through the years and developed into a highly technical product, and no one is better poised to handle these duties and respond to farmer’s needs than a professional insurance agent.

PIA National and our member agents from across the country highly discourage any move toward replacing the professional insurance agent, in whole or in part, with federal employees. Doing so would undermine the current success of the crop insurance program and put it on a path back to a time of proven inefficiency, failure and near collapse.

Congress has a clear choice: preserve the current success of the crop insurance program, or plot a course back to the proven failures of the past. It is critical that Congress reject this ill-advised attempt to expel private sector crop insurance agents from the critical role they play in delivering crop insurance to America’s farmers.

Editor’s Note: Becker is assistant vice president for federal affairs at the National Association of Professional Insurance Agents.