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PIA Cautions Against Additional Crop Cuts in Wake of GAO Report

PIA National is warning against making additional cuts to crop insurance programs, following recommendations by the Government Accountability Office (GAO)
April 17, 2012

PIA National is warning against making additional cuts to crop insurance programs, following recommendations by the Government Accountability Office (GAO). A GAO report says that if a limit of $40,000 had been applied to individual farmers’ crop-insurance-premium subsidies, as it is for other farm programs, the federal government would have saved up to $1 billion in crop-insurance-program costs in 2011.

“We caution against additional cuts to federal crop insurance,” said Mike Becker, assistant vice president of federal affairs of PIA National, in comments to the National Underwriter. “The program sustained multi-billion dollar cuts during the 2008 Farm Bill and additional multi-billion dollar cuts during the most recent Standard Reinsurance Agreement (SRA). A continued array of cuts would lead to a derailed program causing catastrophic failure to America’s agricultural safety net. When it comes to budget cuts, crop insurance has already done much more than its fair share.”

PIA is lobbying Congress to end caps on commissions imposed in the SRA contract agreed to in 2011 that cut existing subsidies in the program by approximately 6 percent over 10 years. PIA is trying to get the 2011 caps removed in the 2012 farm bill now being crafted by Congress.

“Insurance agents are the driving force of this program, working on a daily basis with America’s farmers to ensure proper risk management,” Becker said. “PIA strongly opposes the caps on the compensation private sector insurers can pay their agents which have been imposed by the federal government via the SRA.”

Read PIA's comments about cuts to the crop insurance program: GAO Says Government Should Cap Crop Insurance (National Underwriter 4/12/12)

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