News

Vilsack says most crop insurers will sign SRA

Ag Secretary Tom Vilsack says he expects most crop insurance companies to sign the USDA’s final draft agreement, despite concerns raised in a letter from 16 US Senators. “It’s a fair deal for taxpayers. It’s obviously a good deal for farmers because it doesn’t increase their costs and gives them a chance, potentially, for lower costs. And, it provides greater coverage in more areas of the country.”

The SRA agreement cuts six billion dollars in funding for crop insurance over 10 years. Vilsack says agents will “still receive a fairly significant return” on their “important” work and service. “And companies will have, on balance, about a 14-and-a-half percent return on their money, which is a couple percent above what, historically, the trendlines have been for successful and stable operations.” Last year, companies got a 26 percent return. Vilsack says, “In this economy that just isn’t a fair deal.”

Vilsack claims that companies recognized a more balanced arrangement needed to be reached with companies and agents. “We saw a near doubling of profits for both the agents and the companies in the last couple of years even though we are selling fewer and fewer policies,” says Vilsack. “It should not necessarily be tied simply to commodity prices but there ought to be incentives and encouragement to sell more product and to have it available in more parts of the country.”

The original June 30th deadline for companies to sign the agreement is extended to July 12th.