The Crop Insurance Improvement Act of 1999 encourages farmers to purchase greater coverage by increasing the federal premium subsidy. While the current program was created to help farmers manage their risks, the coverage available to farmers today is often inadequate and too expensive for many producers. The Crop Insurance Improvement Act of 1999 provides real coverage at a fair price.
Crop insurance is one of the best risk management tools available to producers today.
Unfortunately, the program isn't used as often as it should be because of some inherent problems with the way the system is set up. Producers pointed to a number of problems with the current program during our crop insurance hearing in Sioux Falls a few months ago. The Act creates an insurance program that encourages farmers to purchase higher coverage by increasing the federal premium subsidy on higher levels of coverage. A typical Multi-Peril Crop Insurance policy bought by South Dakota producers is a 65 percent level of coverage with 100 percent price election, and a premium subsidy of about 42 percent. If a producer buys 75 percent coverage, the subsidy is only about 23 percent.