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Some Farmers Who Limit Losses to Get Insurance Refunds

The federal government said January 6 it wants to reward farmers under the proposed Good Performance Refund plan who utilize crop insurance and employ good...
January 11, 2011

The federal government said January 6 it wants to reward farmers under the proposed Good Performance Refund plan who utilize crop insurance and employ good risk management protocols. Payments of approximately $1,000 would be mailed in the first quarter and could be used for spring planting. To qualify, farmers must already participate in the crop insurance program at the "buy-up" level, which is one level higher than the less expensive catastrophic risk protection level. The public comment period for the proposal ends January 21.

The plan will cost about $75 million, but the Federal Crop Insurance Corporation said the benefits will outweigh the costs by promoting sound farming practices that reduce losses, discouraging the filing of small claims and encouraging producers to keep using crop insurance. The agency also said the savings may allow for decreases in future premium rates, reducing costs to farmers and taxpayers who subsidize the federal crop insurance program.

Murphy said the money for the refunds is coming from the $6 billion in savings over the next 10 years achieved when Risk Management Agency renegotiated its standard agreement with crop insurance companies last summer. The agency sought the reductions because it contended the crop insurance companies were making excessive profits.

Click here to read Farmers to Get Insurance Refunds (Washington Post 1/6/11)

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