Agent Group Urges Support for One of Three Crop Bills
Independent Insurance Agents of America (IIAA) is calling on lawmakers to support a reform plan offered by Senators Pat Roberts (R-Kan.) and Bob Kerrey (D-Neb.), says IIAA Director of Federal Government Affairs Thomas McCrocklin.
The Senate Agriculture Committee is debating three divergent proposals this week. On the table are the Risk Management for the 21st Century Act (S. 1580), offered by Roberts and Kerrey; the Crop Insurance Equity Act (S. 1108), sponsored by Sen. Thad Cochran (R-Miss.); and the Farmers' Risk Management Act (S. 1666), introduced by Agriculture Committee Chairman Richard Lugar (R-Ind.).
IIAA is strongly supporting the so-called Roberts-Kerrey bill because, they say, it would increase premium subsidies for farmers purchasing crop insurance coverage and does not allow for association purchasing and rebating of coverage. A similar rebating provision was included in a bill-the Agricultural Risk Protection Act (H.R. 2559)-adopted by the House last year and opposed by IIAA.
Sen. Cochran's S. 1108 is specifically tailored for specialty crops and would permit rebating or so-called "association selling", while Chairman Lugar's S. 1666 would create direct income-transfer payments to farmers, the Big I adds.
Agent issues
For independent agents, the Senate's crop insurance reform debate turns on two issues: whether the increased funding should be used for increasing premium subsidies or direct payments to farmers, and whether state anti-rebating laws should be preempted to allow non-profit co-operatives to engage in questionable insurance sales practices that in many instances run counter to state law. Non-profit co-operatives include farm co-operatives, trade associations and grower groups.
"There is a strong clash within the committee on what form the markup legislative vehicle should be," explains McCrocklin. "For IIAA, the preferred measure is the Roberts-Kerrey bill and we are calling on the members of the committee to support this legislation.
"S. 1580 will infuse the current crop insurance program with money to provide larger subsidies to farmers who purchase coverage for their crops-more farmer participation means a more viable and actuarially sound crop insurance program. Furthermore, S. 1580 does not permit direct cash payments to farmers, a practice that runs contrary to sound risk-management principles, or preemption of state anti-rebating laws," says McCrocklin.
IIAA supports using the funds for increased premium subsidies and opposes preemption of state consumer protection laws. "IIAA is supporting the Roberts-Kerrey bill because it will strengthen the existing crop insurance program and not open the marketplace to unfair competitive practices by groups that want to position themselves as preferred crop insurance providers," says McCrocklin.
"IIAA is concerned that the direct payments proposed in the Lugar bill could rekindle farmer expectations of budget-busting, ad-hoc disaster relief payments," says McCrocklin. "Instead of using money for direct payments, Congress should increase funding of the crop insurance program to make it the risk- management tool of choice. We should invest in making the crop insurance program a viable option for the nation's farmers instead of continually diluting its effectiveness in the farming community."
On the "association selling" issue, IIAA believes all relevant state laws barring rebating should not be preempted to allow farm-related cooperatives to rebate policies for their members. The Roberts-Kerrey bill does not preempt state anti-rebating laws, a position strongly backed by IIAA.
"Any bill considered and approved by Congress should respect state law," says McCrocklin. "To preempt state anti-rebating laws would threaten the states' ability to ensure a level playing field for all licensed agents selling crop insurance policies. There is no room for special 'carve outs' in a fair crop insurance reform bill. Protection of state insurance law should also apply to the U.S. Department of Agriculture, which recently has expressed an interest in making determinations on rebating-which traditionally is a state decision.
"We strongly urge senators to support the licensing, sales and solicitation laws of their respective states so that consumers will continue to be protected from deceptive sales practices and the crop insurance marketplace remains competitive," continues McCrocklin.
Currently, a majority of the members of the Senate Agriculture Committee support IIAA-backed S. 1580, giving the reform plan a leg up, notes McCrocklin.