One of the most significant areas addressed by the Agricultural Risk Protection Act of 2000 is in the area of strengthening the rules governing fraud, waste and abuse in the crop insurance program. As an industry, we need to work together to do everything we can to protect the integrity of this program.
Because of this, I decided to write a letter to all of the farmers we serve telling them about these new initiatives and what it means to them. This letter, distributed to newspapers nationwide, is reprinted below. You will also find in the center spread of this magazine, a poster that we encourage you to hang on a wall in your office. This shows our clients that we are committed to not only "talk the talk" but to take a stand and speak out about what we know is right. We hope you will stand up with us as we fight to make this program as good as it can be.

Open letter to farmers, from your crop insurance companies
Fraud, waste and abuse hurt us all

By Bob Parkerson, President, National Crop Insurance Services, Inc.

For the farmers we serve, what was most important about the Agricultural Risk Protection Act of 2000 (ARPA) was the significant increase in Federal subsidies over the previous legislation.
That increase will enable you to buy up to more adequate levels of crop insurance protection and help extend the benefits of crop insurance to more farm families. It will help shore up rural communities hit hard by low prices for agricultural products and left behind by the economic boom experienced by the rest of America. It will help protect all of the small places most of us in the crop insurance industry came from and where most of us still live and work.

But for those of us in the business of delivering and servicing crop insurance policies, the most important parts of the legislation were those that dealt with strengthening the rules governing fraud, waste and abuse.
Our livelihoods depend on the integrity of the crop insurance program. Without it you would have to pay more than your fair share of premiums. Without it we in the crop insurance industry would go broke. We have all worked too hard and achieved too much to allow the slightest erosion of the integrity of the crop insurance program.

I know our industry has come a long way. The reserves we are able to set aside in good years now help protect the crop insurance program in bad years. We have also significantly lowered the cost of delivering crop insurance.

According to a Price Waterhouse analysis, our companies consistently show lower total expense ratios than the Property/Casualty industry. They also said "…the work required to sell or renew an MPCI policy is considerably more intense than that of the typical Property/Casualty sales process." That, of course, is not news to those of you who work with our agents and adjusters.
Those accomplishments-efficient, low cost delivery and the continuing growth of the crop insurance program--must not be jeopardized by fraud, waste and abuse.

Farmers have come a long way in their knowledge of risk management. More and more of you have invested in higher levels of crop insurance. Many of you have learned how to use your insurance in conjunction with forward pricing to enhance your profits. You understand better than anyone how fraud, waste and abuse can cause you to have to pay more for crop insurance.
Together the crop insurance industry and you, the farmers we serve, share a common interest in preventing fraud, waste and abuse.
How will tightening controls on fraud, waste and abuse affect you?

Well, your crop insurance agent will experience more documentation requirements, more time spent with auditors and investigators, more demands on already long work weeks. In this first year, everything is likely to take just a little bit longer than before. Be patient with your agent. Just remember, if even only a few extra cases of fraud, waste and abuse are detected and resolved, the integrity of your crop insurance program will be better protected.

If you have knowledge of crop insurance abuse, call your crop insurance agent or the USDA hotline number at 1-800-424-9121.