As bill could avoid crop insurance cuts, NCIS rolls out insurance explainer

As bill could avoid crop insurance cuts, NCIS rolls out insurance explainer

Highway Bill includes language to limit crop insurance cuts proposed in November budget bill; Crop Insurers release video

Just a day after language to avoid previously proposed crop insurance cuts surfaced in the text of a compromise highway bill, the National Crop Insurance Services has rolled out a new video to explain how crop insurance works.

Related: Crop insurance cuts resolved favorably, for now

"Instead of getting a check in the mail, farmers now get a bill," the video explained. "And, because private insurers deliver the system and help shoulder risk, taxpayers aren't left footing the whole bill when disaster strikes."

The group stresses that by investing in crop insurance and farm policies, all Americans reap benefits.

Highway Bill includes language to limit crop insurance cuts proposed in November budget bill; Crop Insurers release video (Thinkstock/LKBunnell)

"Farm policy critics often use misinformation and misperceptions about agriculture to attack crop insurance, and NCIS produced its video to help combat those efforts," a press statement noted.

NCIS says the $4 billion a year farmers now spend to buy insurance protection is a departure from direct payments from the government and $70 billion in disaster bills.

The video also explained private-sector returns for delivering crop insurance. Under a 2011 agreement between the government and crop insurers, 14.5% was targeted as an expected gross revenue.

"But those returns aren't guaranteed and haven't materialized," NCIS said in its video. "Actual gross revenue turned out to be 5.7% – not even half the targeted amount. When you subtract expenses, crop insurers lost 1.4% from 2011 to 2014."

Related: House Ag Committee leaders say budget crop insurance cuts eliminated

While Congress considers the provision in the highway bill that will limit a November budget bill's $3 billion in crop insurance cuts, NCIS explains that if they come to fruition, returns would be lowered another 38%.

This situation would "further [compound] private-sector losses and [make] it extremely difficult for crop insurance providers to stay in business."

See the full video below:

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish