Crop Insurance Today Fourth Quarter 2021 - 32

Continued from page 1
modeling approaches raise serious questions
with respect to causality versus associative effects
or correlation. Obviously, the incentive structure
of crop insurance and the potential for distortionary
effects are interrelated.
In any case, it is healthy to continue to examine
the behavioral implications underlying
crop insurance in order to better understand
and improve upon the incentive structure of
the program going forward.
11. Can crop insurance be used to achieve
multiple policy objectives?
This question was not one of the original " Ten
Considerations. " The notion of achieving multiple
policy objectives through the federal crop insurance
program has surfaced in large part due
the program's wide-scale participation, its efficiency,
and the role that incentives have played
in the unqualified success of the program. Upon
a bit of reflection, the question could be framed
alternatively as " can crop insurance help support
multiple policy objectives? " Yes, of course, and
both RMA and the industry have responded
to the challenge. In the early days of the transition
of the new Administration, three priorities
were made clear: 1) continued response to the
Covid-19 pandemic; 2) climate initiatives; and
3) issues of racial equity and inclusion.
Beginning with the pandemic starting in
March of 2020, both RMA and the AIPs have
worked tirelessly in order that farmers and
the delivery system were provided the flexibilities
needed to ensure that crop insurance
was made available safely and with as little
disruption as possible. With respect to climate
initiatives, the most obvious examples
are the cover crop premium support programs.
For the last several years, the states of
Illinois, Iowa, and more recently Indiana, offer
farmers a premium discount if they plant
cover crops. Earlier this year, the USDA/Risk
Management Agency announced the implementation
of the Pandemic Cover Crop Program
(PCCP) to provide crop insurance premium
support to farmers who insured their
spring crop and planted a qualifying cover
crop during the 2021 crop year. Lastly, regarding
issues of racial equity and inclusion,
the AIPs, through their support of NCIS outreach
activities, have been engaged in risk
management education and outreach activi32
FOURTHQUARTER2021
ties for underserved farmers for more than
two decades. NCIS also has supported more
than 30 1890 university students through
scholarships and most recently, a summer internship
program.
In the pursuit and support of multiple
policy objectives, the challenge will be that
of determining priorities while maintaining
the primary focus on the essential mission
of crop insurance-which is to provide risk
management services to America's farmers
and ranchers.
12. Do crop insurance and ad hoc disaster
assistance programs work together or are
they mutually exclusive?
In the days following the 2012 drought-
the worst disaster to befall U.S. agriculture
since the Dust Bowl era-crop insurance was
celebrated by policymakers for its effectiveness.
Assistance was delivered quickly thanks
to private-sector efficiency, and taxpayer expense
was offset with investments from farmers
and insurers. The fact that there were no
calls for ad hoc disaster aid despite the more
than $17 billion in losses suffered was a testament
to crop insurance's popularity throughout
the Midwest.
However, our recent past has demonstrated
that additional disaster assistance is both
an economic and political reality, most specifically
in situations where the damage extends
beyond insurable crops and wipes out
equipment and structures essential to farming.
In these situations, it may be prudent for
lawmakers to supplement insurance with disaster
aid, as they have in recent years. That
does not mean insurance was ineffective, it
just means farmers needed additional help
to overcome Mother Nature's wrath. That
said, lawmakers typically want to minimize
these occurrences, recognizing the speed,
accuracy, and cost effectiveness in which
crop insurance performs. That is why buying
insurance coverage in the future is usually
a prerequisite for farmers receiving ad hoc
aid. At issue for the industry is not a binary
choice between crop insurance and disaster
aid. That choice will be made in the political
space. At issue is what do we learn from
catastrophic weather and market events that
help us continue to improve crop insurance
in the future.
Consideration 13 (Why not make it a Baker's
Dozen?)
As we reflect over the past year and the
continuing pandemic, it is worth " considering "
how much has been lost and sacrificed
and how much has been learned. Losses and
sacrifices have been both tragic and disproportionate.
At the same time, much has been
learned that can benefit all of us as we navigate
the future. As we consider the New Year let us
resolve to take the lessons learned in the past
two years and build upon them.
In This Issue
In this issue we welcome the new RMA
Administrator, Marcia Bunger and introduce
her priorities to you in our first article. We
look forward to working with Administrator
Bunger and the rest of the RMA staff as we
move into the new year.
The pandemic thwarted some of the association
activities in 2020 but we were determined
to find a way to present adjuster education
sessions in 2021. And through the help of
many people from the AIPs, staff was able to
do just that. The virtual loss adjuster schools
were a huge success, and you can read all
about them starting on page 8. We are hopeful
that the schools will be back to " normal " in
2022, but we are confident that we can provide
valuable education in a virtual environment if
we need to do so again.
There are several great training and informational
resources in this issue. The popular
Crop Plan Comparison chart is included,
along with a new Livestock Plan Comparison
chart that provides information about these
programs that are growing in popularity.
Once again, NCIS has named five students
to receive a scholarship for the next four semesters
of college. These students all attend an
1890 University and are studying an agricultural
discipline. You can learn more about these
individuals in the article starting on page 14.
And lastly, we introduce you to Dustin
Johnson, a farmer in eastern Iowa who works
very hard to provide for his family, protect
the land he farms, and uses crop insurance to
ensure he can continue his family legacy for
many years to come.
We hope that you enjoy all of the features in
the magazine and wish you all the best in 2022!
Crop Insurance Today Fourth Quarter 2021

Table of Contents for the Digital Edition of Crop Insurance Today Fourth Quarter 2021
