Crop Insurance Versus NASCOE

Via Farm Policy, the crop insurance industry counters NASCOE arguments:

Those who call for greater Farm Service Agency involvement in claims adjustment as a way of saving Federal jobs in the countryside do not have the interests of farmers at heart. The “modern” crop insurance program started out in the 1980s with a dual system of delivery in which farmers were given the choice of buying policies sold by private agents who contracted with the government and had the government service claims, or they could buy policies from private companies who would both sell policies and service claims. Because the private sector outperformed the government, especially in terms of quality of
farmer services, timeliness and accuracy of claims processing and cost (1989 Arthur Andersen study reported government cost was more than twice that of the private sector), all program delivery was assigned to the private sector by the end of the 1980s.

I wonder about the context of the 1989 study.  That would FCIC representing government delivery and probably a mostly manual process.  I doubt the Reagan administration would have supported a fair test.  Myself, I don't believe FSA could sell insurance effectively; they just don't have the incentives to do so, but servicing the policies ought to be within their capability.

The AACI statement goes on to bemoan the fact that crop insurance isn't available everywhere, which makes me laugh since FSA's involvement with CAT was ended because it was available everywhere.