Peterson says budget provision will kill crop insurance industry

Oct 29, 2015 Issues: Congressional Issues

WASHINGTON – Congressman Collin C. Peterson today made the following statement on the crop insurance cuts included in the “Bipartisan Budget Agreement of 2015”:

“The provision included in the new budget agreement would re-open the 2014 Farm Bill and in my opinion has the potential to wipe out the federal crop insurance program. The language in the budget deal would require a new Standard Reinsurance Agreement that would reduce from 14.5 percent to 8.9 percent the cap on the overall rate of return for insurance providers.

“While an 8.9 percent rate of return might seem like a lot, the way these things are calculated has the effect of an actual rate of return that’s closer to 1 or 2 percent. “Crop insurance is an extremely risky industry and we already are seeing market consolidation in the industry due to previous cuts. The effect of this cut will be to destroy the industry altogether. These negotiators have no clue what they’re doing and I will fight this provision and work to defeat this bill.”