Philip Brasher reported yesterday at the Green Fields Blog (Des Moines Register) that, “Although crop insurance companies and agents have strongly criticized some of the proposals, USDA officials said they expect to make only small changes to the plan being submitted to the companies Thursday. Industry officials and congressional staffs were getting their first look at the plan this afternoon. Key farm-state lawmakers, including Sen. Charles Grassley, R-Ia., have expressed opposition to earlier drafts, citing its impact on agents and impact on spending levels for the next farm bill.”This means the average liability per policy is $58000 and the average agent has 22 policies. When I first saw those figures, I said to myself I'd find out the relevant stats for Iowa for the FSA side and compare the two operations. Turns out federal employment numbers are hard to find, very hard to find. So I'll merely suggest it would be good for concerned politicians and/or interest groups to request either CRS and/or GAO to look at such a comparison. I vaguely remember back in 1996 someone, maybe GAO, looked at the costs for administering the CAT policies between FSA and the private companies. Seems to me FSA came out okay, particularly as we were still in the learning curve. Didn't make any difference though; the powers that be still decided to sell all CAT through the agents.
Mr. Brasher explained that, “Iowa has more at stake than any other state. Iowa farmers took out nearly 159,000 policies in 2009 worth $9.2 billion in total liabilities, the most of any state. There are more than 7,000 agents in the state licensed to sell the policies, and another 700 people are employed by the companies in underwriting, billing and other jobs. Four of the 16 companies that handle the insurance nationwide are based in Iowa: John Deere Risk Protection Inc. and Rain and Hail LLC in Johnston, Farmers Mutual Hail Insurance Co. in West Des Moines, and Agro National LLC of Council Bluffs.”
Saturday, June 12, 2010
From Farm Policy in the context of reporting on proposals to cut the subsidy for administrative expenses for crop insurance: