NACIA Washington Update
December 17, 2009

It is just one week until Christmas Eve and Hanukkah is about conclude, so we would like to wish you and your loved ones a blessed holiday season.

Due to the SRA negotiations, it is unseasonably busy for NACIA and others in the crop insurance arena here in Washington.  Those outside the crop insurance world are also busy with the “other” negotiations (health care), but we are focused on the SRA.  NACIA and other members of the crop insurance industry have been engaged in a multitude of meetings over the last week with both House and Senate staff, as well as other members of the agriculture community. Due to the egregious cuts the proposed draft makes, we are working to enlist producer groups to support the crop insurance program, as well encourage Members of Congress to support the program as well. We are educating both of these groups regarding the potential effects that, if enacted, this proposal would have on their producers and their districts and home states. Detrimental effects of the proposed $4 billion in cuts to the program include the following: 

• The large majority of the cuts come from A&O, the funding stream by which agents get paid for their work. The cuts would hamstring the ability of agents to deliver the current high-level of care and service to farmers and ranchers. 
• Severe cuts to A&O would cause many agent small businesses, which are already operating on thin margins, to further cut back – jeopardizing essential rural jobs in an unfavorable economic climate. During attempts to move out of the recession, the Administration has stressed the importance of small businesses and of sustaining and creating rural jobs.  Given that emphasis, we find it surprising that the Administration would then want drastically cut a funding source for thousands of jobs in rural America. 
• The proposed SRA would push many of the smaller crop insurance providers out of the business, and may cause the larger companies to do the same. This would have a devastating effect on the farm safety net, leaving producers without income assurance or access to vital credit. 

We know that many of the crop insurance companies have asked you to contact your Representative or Senator and urge them to express their opposition to the current SRA proposal. While that is important, we would also strongly encourage you to remind your company reps that they cannot operate without agents, and that A&O is equally as important as underwriting gains. Out of the $4 billion proposed in cuts, $2.2 billion come from A&O, and $1.8 billion come from underwriting gains. While NACIA and the agents have been involved as much as possible in meetings and activities surrounding the SRA, we legally do not have a seat at the table for the actual negotiations between the companies and RMA. We would ask that you urge your companies to be as equally aggressive defending A&O as they have been defending underwriting gains during this process.  

In news other than the SRA, the following items may be of interest:

• RMA has just released its 2010 Grain Sorghum Loss Adjustment Standards Handbook for crop years 2010 and after. Handbook.
• RMA has also just released its 2010 Sunflower Loss Adjustment Standards Handbook for crop years 2010 and after. Handbook.
• RMA has issued an Informational Memorandum regarding discrepancies in data maintained by RMA and FSA.  Claims Advisory -- Entity Discrepancies.
• USDA announced it will hold a series of community roundtables and forums on job creation and economic growth.  Rural Development state directors and FSA state executive directors will host the forums. Click here for more information and a list of scheduled forums thus far.
• USDA announced a new pilot project for farmers to establish one high tunnel per farm in order to evaluate their effectiveness in reducing pesticide use, keeping vital nutrients in the soil, extending the growing season, and increasing yields, among other benefits. Financial assistance will be provided through the NRCS Environmental Quality Incentives Program (EQIP), the EQIP Organic Initiative, and the Agricultural Management Assistance program. For more information, including a list of participating states and territories click here.
• USDA, in cooperation with the University Corporation for Atmospheric Research and the U.S. Global Change Research Program, released a report entitled, “The Effects of Climate Change on U.S. Ecosystems” at the climate talks in Copenhagen, Denmark. Some of the findings include effects on crop product, distribution, and yields, as well as crop vulnerability, maturity rates and disease resistance. Click here to view the full report. USDA’s press release may also be viewed here.

As always, please let us know if you have any questions. 

Brent W. Gattis
NACIA Washington Representative