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Insurance Industry Questions Profit Numbers

April 2010

The battle over future billions of dollars for crop insurance continued on Monday, with the crop-insurance industry questioning USDA’s profit analysis, saying USDA’s Risk Management Agency “understands too well that conclusions can’t be drawn from data representing such a narrow timeframe. A long-term view is essential when analyzing a program based on a private insurance model, where any year’s returns can vary due to weather or fluctuating crop prices. In fact, when discussing the rating of crop insurance policies in a recent interview, USDA’s Risk Management Agency Administrator William Murphy indicated that a short timeframe is inappropriate when making crop risk-based policy decisions, adding that the analytical horizon had to extend back to the middle 1970’s to ensure the policies were correct.”

DTN / The Progressive Farmer

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