Crop Insurance

PIA supports the vital role of independent agents in the delivery of crop insurance.

The federal crop insurance program is a highly technical program that relies on the expertise of independent insurance agents. Crop insurance offers our nation’s farmers the ability to manage their risk while continuously providing Americans with a safe, strong, and dependable food supply. The federal crop insurance program requires private-sector insurance carriers to offer insurance to growers who are eligible for coverage and interested in purchasing it.

Unlike insurers in other lines of business, crop insurers do not set premiums. Instead, farmers’ rates are calculated by the United States Department of Agriculture (USDA), and, unlike prices for other insurance products, crop insurance prices are consistent across insurers.

Opposing crop insurance cuts

Despite the critical role crop insurance plays in protecting farmers from natural and economic disasters and in supporting rural economies, presidents of both parties have historically tried to cut crop insurance funding using the budget and appropriations process.

PIA routinely works with a coalition of organizations that represent every part of the crop supply chain to protect the funding of the federal crop insurance program. This advocacy is required due to past attempts to cut the program. For example, in 2015, Congress cut $3 billion from the program, but PIA and its allies successfully pushed for a statutory reversal to the cuts. In addition, billions of dollars in cuts to crop insurance have been included in presidential budget requests for most of the last decade.

Cuts to the program compromise the affordability and availability of crop insurance for farmers, seriously undermining the strength of the farm safety net. PIA will continue to work against any attempts to cut crop insurance throughout 2024.

Seeking inflation adjustments

The 2011 Standard Reinsurance Agreement (SRA), which is the contract between the federal government and crop insurers, establishes a cap on the administrative and operating (A&O) expense subsidy, a pool of funds from which crop insurers pay agent commissions. Then, beginning in 2016, the RMA stopped making annual adjustments to the total A&O subsidy cap for inflation, leaving the cap fixed in 2015 dollars, where it remains today. These actions resulted in effective cuts to crop insurance agent commissions, during a historically challenging time for agents.

In late 2022, PIA and its allies successfully advocated for the inclusion of language in an appropriations package, which was ultimately signed into law, stating Congress’ belief that the RMA has the legal authority to reinstate the inflation adjustment without renegotiating the SRA. Despite this explicit Congressional declaration, the RMA insists that it does not have the legal authority to reinstate the inflation adjustment and has declined to act. As a result, this bill was developed to address the issue directly.

To address this issue legislatively, PIA worked to develop a bill introduced in the 118th Congress, the bipartisan Ensuring Access to Risk Management Act of 2024 (H.R. 8055) introduced by Rep. Austin Scott (R-GA) with original cosponsors Reps. Jimmy Panetta (D-CA) and Tracey Mann (R-KS). The bill seeks to provide relief for crop insurance agents who have had their commissions effectively cut for the past several years, ever since the RMA abruptly stopped providing an inflation adjustment to crop agent compensation in 2016. The legislation would require the RMA to reinstate an annual inflation adjustment and provide for specialty crop relief. PIA was also pleased that key provisions of this bill were included in legislation to reauthorize the Farm bill, H.R. 8467, the Farm, Food, and National Security Act, which passed the House Agriculture Committee on May 24.

PIA will continue to urge the RMA to restore the inflation adjustment and will continue to pressure Congress to address the inflation issue in the Farm Bill reauthorization process if the USDA does not independently reinstate the inflation adjustment.

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