Don’t turn the clock back on who sells federal crop insurance

By Mike Becker

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Congress is currently working on legislation that could lead to big changes to federal crop insurance and have major effects on America's farmers. As part of this process, our federal legislators are listening to the views of their constituents on how to make this program more efficient and better serving to the country.

However, if one group has its way, they 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 that the program serves.

The National Association of Farm Service Agency County Office Employees (NASCOE) is an organization that represents employees of the Farm Service Agency (FSA). 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.

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 virtually abandoned the federal government option and purchased their crop insurance through the private sector. The federal option was quickly 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 well over $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.

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 and conflict with the 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, among their full array of responsibilities and value brought to farmers.

Crop insurance has changed over 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 that of a professional insurance agent.

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.

Mike Becker is assistant vice president, Federal Affairs, National Association of Professional Insurance Agents. Comments: mikebe@

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