Private involvement essential to crop insurance future, group says

Private involvement essential to crop insurance future, group says

National Crop Insurance Services says private sector assumes costs of maintaining system used to provide insurance to farmers

National Crop Insurance Services has released a video explaining why private sector involvement is necessary to maintain the future of crop insurance.

Related: Web Resource Offers Answers to Crop Insurance Questions

The group, a non-profit that supports interests of private crop insurance providers, says private sector involvement in the federal crop insurance program is necessary because these companies shoulder risk that would otherwise be borne by taxpayers.

NCIS says private companies also maintain the system used to efficiently provide assistance to farm families following disasters.

Private sector involvement is at risk, however, if the business does not remain viable.

National Crop Insurance Services says private sector assumes costs of maintaining system used to provide insurance to farmers in times of disaster.

"Key to this viability is a reasonable rate of return for insurers on the infrastructure they built to deliver farmers' most important risk management tool," NCIS' new video explains. "An adequate return on investment enables insurance providers to routinely reinvest in technology, infrastructure efficiency, and service improvements for farmers and ranchers. Unfortunately, adequate returns don't always happen."

The 2014 Farm Bill took steps towards improving crop insurance by expanding coverage, by bringing new customers into the system, and by providing new tools to continually minimize waste, fraud, and abuse, NCIS said.

Tom Zacharias, president of NCIS, applauded Congress' actions and said it will be important to continue making improvements by reducing regulatory burdens, avoiding further funding cuts, and keeping crop insurance actuarially sound.

He thinks all Americans have a stake in the future of crop insurance.

"After all, not everyone farms, but everyone eats. So everyone depends on a strong farm policy," the video concluded.

See the video below.

TAGS: USDA
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