GAO Report Calls for Continued Improvement of Crop Insurance

Although USDA's Risk Management Agency has made improvements to the crop insurance program, a Government Accountability Office says the program is still vulnerable to fraud, waste and abuse.

Published on: May 3, 2007

A 2005 Government Accountability Office report said that the USDA Risk Management Agency was not taking adequate actions to stem the crop insurance program's vulnerability to fraud, waste, and abuse. GAO released a new report on crop insurance Thursday, crediting RMA with taking steps to improve the program, but also saying more work needs to be done.

Aspects of the crop insurance program that GAO says have improved include timelier Farm Service Agency inspections to assure farmers don't falsely claim crop losses; improved data on ownership interests to keep a better watch for program abuse, which should result in the recovery of up to $74 million in improper payments from 2003; and an RMA agreement to improve oversight of insurance companies' efforts to stem program abuse.

GAO recommends that Congress use the next farm bill to grant RMA authority to periodically renegotiate terms with companies in order to provide reasonable cost allowances and underwriting gains. Currently, the Agricultural Risk Protection Act of 2000 grants RMA authority to renegotiate terms with companies once over five years.