Press Release: NAU Country President Jim Korin Highlights Importance of Crop Insurance Industry in Testimony to U.S. Senate Committee
In a press release published today, highlights are shared from NAU Country Insurance Company's President Jim Korin’s compelling testimony at a recent hearing with the United States Senate Committee on Agriculture, Nutrition, and Forestry-Subcommittee on Commodities, Risk Management, and Trade.
NEW YORK, May 25, 2023 / PRNewswire / -- NAU Country Insurance Company's President, Jim Korin, delivered a compelling testimony on the significance of the crop insurance industry to the United States Senate Committee on Agriculture, Nutrition, and Forestry-Subcommittee on Commodities, Risk Management, and Trade's recent hearing.
In his testimony, Korin highlighted the historical roots of NAU Country, tracing back to the inception of crop insurance and its partnership between the Federal Government, the private sector and the American farmer. Today, Federal crop insurance covers approximately 135 crops, spanning nearly 400 million acres of production agriculture across the United States. In addition to protecting farmers against financial losses caused by various threats that can adversely affect crops, it plays a vital role for the American people by maintaining price stability in the agricultural sector, promoting food security, strengthening rural economies and reducing reliance on government aid. With the support of multiple competing companies, independent agents and thousands of employees, crop insurance covers over 90% of production agriculture in America.
"Crop insurance is a crucial risk management tool for farmers, and it has been successful due to its public-private partnership and support from Congress," said Korin. "It continues to evolve to meet new agricultural challenges and provide farmers and ranchers with the tools they need to succeed."
Korin emphasized three key principles in his testimony that underpin the success of crop insurance: flexibility, affordability, and availability.
- Flexibility: Farmers have the ability to tailor coverage to their unique operational and risk management needs, with options ranging from individual-field to whole-farm to county-based coverage. Plans offering coverage from 50% up to 95% ensure that crop insurance is accessible to farmers of all sizes and financial situations.
- Affordability: Crop insurance contributes to maintaining a safe and affordable food supply, ensuring that farmers are equipped with a safety net to navigate adverse growing seasons. The partnership between the private sector and the government, sharing risk and providing premium support, allows farmers to afford the coverage they require. This mutually beneficial arrangement also offsets costs to taxpayers, enabling the expansion and sustainability of crop insurance.
- Availability: The private sector's involvement in the delivery of crop insurance is vital for its continued success. Companies like NAU Country invest billions of dollars in rural communities, contracting agents, expanding technologies, and assuming significant capital risks. These investments provide coverage that supports the nation's producers, making funds available promptly when claims are made.
While crop insurance has proven effective, Korin also identified areas for improvement, including:
- Enhanced Coverages: NAU Country and other industry participants are actively collaborating with producers and commodity groups to enhance and expand coverage options for crops that safeguard the future of production agriculture. Initiatives like the Enhanced Coverage Option (ECO) policy and the Hurricane Insurance Protection-Wind Index (HIP-WI) endorsement have already shown promise in providing additional coverage during natural disasters. Making these policies more affordable will further strengthen their effectiveness and reduce the need for ad hoc assistance.
- Refinement of Processes: Continued refinement of the 508(h) process, which allows for innovative offerings in crop insurance, can enhance the delivery and effectiveness of the program. Collaborative efforts with the Risk Management Agency (RMA) aim to streamline the timing of new policies coming to market and improve the development of new 508(h) products, ultimately reducing costs and increasing market uptake.
- Administrative Reimbursements: The crop insurance industry has operated on stagnant administrative reimbursements since 2015 while experiencing significant wage inflation and cost increases. The industry supports a simple inflationary adjustment to ensure equitable relief and benefit program delivery for all farmers.
- Environmental Practices: American farmers have already adopted various environmentally friendly practices, such as no-till farming, cover crops, variable-rate fertilizer and chemical application, and the use of cleaner-burning tractors. Farmers purchasing crop insurance must certify compliance with land management practices for highly erodible lands and wetlands, administered by the USDA's Natural Resources Conservation Service (NRCS). While further adoption of carbon-sequestering farming practices is seen as beneficial, it is cautioned that non-market incentives should come from separately funded initiatives to avoid detracting from the crop insurance program. Crop insurance is considered vital to the survival of farmers and ranchers, as they can only implement such practices if they remain in business.
- Actuarial Soundness: Changes that exclude individuals from eligibility would undermine the actuarial soundness of the program. Crop insurance's effectiveness relies on the diversity of the risk pool, including farmers and ranchers of all sizes from every county in the country. Diluting the risk pool could increase premiums for those who remain eligible.
About NAU Country - Federal Crop Insurance Provider
NAU Country's founding family's rich history started in the 1980s when Jim Deal helped initiate the successful partnership between the government and the private sector. As the company grew from a small business to an industry leader, it gained a strong parent company in QBE. The financial strength of QBE in a global market adds economic stability to local efforts. Today, NAU Country continues to provide financial security for our nation's farming communities. Additional information can be found at naucountry.com or on LinkedIn and Facebook.
Original publish date: May 25, 2023 | NAU Country President Jim Korin Highlights Importance of Crop Insurance Industry in Testimony to U.S. Senate Committee | Source: https://www.prnewswire.com/news-releases/nau-country-president-jim-korin-highlights-importance-of-crop-insurance-industry-in-testimony-to-us-senate-committee-301834659.html
- Watch the hearing and NAU Country News: Watch the hearing and view a copy of President Jim Korin's testimony