Agricultural News
Crop Insurance is a "Critical Issue for Us," Tom Zacharias Tells Ag Summit
Tue, 10 Sep 2013 17:25:37 CDT
A lot of people are taking pot shots at the crop insurance industry and those characterizations may not be fair says Tom Zacharias of National Crop Insurance Services. He spoke to attendees at the Ag Issues Summit in Oklahoma City. Radio Oklahoma Network Farm Director Ron Hays talked with Zacharias about the current critics of the crop insurance programs and what can be expected in the future. (You can listen to their conversation by clicking on the LISTEN BAR at the bottom of this story.)
"The critics of the program look at this in a short-term perspective. They don't look long term when they think about it-Agriculture is important. It's fundamental to the economy. It's fundamental to the regions that are agriculturally based. So to have a safety net that supports that and promotes financial stability for our farmers, this is a critical issue for us."
Some critics of crop insurance, both and out of Congress have talked about limitations on the payment premium.
"Anything that is put in place that limits participation or discourages farmers from participating is going to have a long-term negative impact on the program. The program is insurance based, so we need low-risk producers in the program and we need large-scale participation. So, when you put constraints on that or impediments to that, you're going to degrade the actuarial performance and participation. Then we're going to end up with a situation where farmers don't have coverage and we walk into the demand or need for disaster legislation which will be an impossible battle in today's environment."
Zacharias says there has been a tremendous growth in the number of acres enrolled in crop insurance programs. In 1998 there were about 180 million acres covered and now there are approximately 280 million acres covered. Zacharias says the program has met the goals set by Congress and is on an actuarially-sound basis.
Looking down the road to the future, Zacharias says crop insurance can be expanded to bring vegetables and specialty crops under its umbrella if producers, the insurance industry and the USDA's Risk Management Agency will come together to cooperate.
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