|
| |
Public Policy and Federal Crop Insurance - Cont.
Although the mandatory purchase of crop insurance was rescinded for 1996, the level of crop insurance sales remains high. In 1998, premiums reached a record $1,875 million and insured acres approached 70 percent of planted.
During the 1990s, the Congress also authorized subsidies and reinsurance for commercially developed insurance products. The first of these was offered in 1996. It modified the traditional insurance plan that indemnified only losses in yield so that changes in market prices for the insured commodity also could result in an indemnity. A commercial product from a second company, again one that includes risk of changes in market prices, was introduced in 1997. A third commercial product has been introduced for 1999. More are anticipated in future years.
The thrusts of public policy during the past two decades have been twofold: encourage farmers to actively manage the risks they have in farming and to encourage commercial insurance companies to be more active in this market. Both thrusts have been successful. More acres are insured, premiums are at record levels, and private companies are much more involved with providing this coverage.
|