NCGA Expresses Mixed Feelings about Crop Insurance Policies

The National Corn Growers Association sent comments to the U.S. Department of Agriculture Risk Management Agency in regards to Crop Insurance Policies.

Published on: Oct 31, 2006

The National Corn Growers Association approves of the direction the RMA appears to be headed in efforts to protect both revenue and yield, but believes more adjustments need to be made, the organization said in comments to the USDA Risk Management Agency.

NCGA comments came in response to the Federal Crop Insurance Corporation's proposed rule that would combine Crop Revenue Coverage, Revenue Insurance and Income Protection programs.

NCGA supports the proposed rule's benefits, such as simplified product selection, reduction of unnecessary paperwork, and efforts to enhance producers' understanding of coverage options. However, NCGA President Ken McCauley warns of proposed changes that could threaten the value and protection of coverage.

"The provision that would limit the harvest price option (HPO) to crops with revenue protection, in our view, is overly restrictive," McCauley said. "To enhance a producer's ability to better compliment his crop insurance coverage with other farm program support and private risk management tools, NCGA recommends the insured be allowed the flexibility to select the HPO with the option to purchase an upside price replacement coverage endorsement."

McCauley also points out that a proposed limit on price increases at 160% would make it difficult for producers to keep a hedge position, and questions a proposed reduction of the projected price discovery period to 15 days from the current 30 days. Nevertheless, McCauley says, the FCIC was right to propose ways to make the prevented planting provision in the Common Crop Insurance Regulations clearer and more flexible.