Crop Insurance A & O Needs Boost, USDA Has Authority

The crop insurance industry says delivering more and better policies will require an overdue boost in USDA support for administrative and operating or ‘A & O’ expenses. A & O is another driver in the push to improve crop insurance—the one part of the farm safety net the industry and producers argue provides timely and meaningful help when other support falls short.

William Cole is Chair of the Crop Insurance Professionals Association; “Let’s correct the serious and unsustainable flaws in our A & O system to ensure that agents and loss adjusters can continue to provide the excellent service that is one of the core pillars of federal crop insurance.”

And it’s not just a concern for the crop insurance industry but lawmakers like North Dakota Senator John Hoeven. He said; “USDA has the authority to provide inflationary adjustments. They haven’t done that since 2015. They did it before. That authority did not magically disappear. They have it.”

Crop insurance agent Cole says USDA support for administrative and operating costs has been key to the program’s success. Cole; “From 1938 to 1980, crop insurance struggled. But in 1980, when crop insurance was turned over to the private sector, it began to take off and became the vital program to farmers and ranchers that it is today. Fixing this A & O issue is critically important for the infrastructure like companies, adjusters, and agents, that will support this vital program to meet the needs of the producers in the future.”

Cole also urged lawmakers to help reduce deductibles to boost participation at higher-coverage levels and get RMA and insurers to develop policies that work for all producers, regions, and commodities. And do so to stem reliance on ad-hoc disaster aid.

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