Extension Communications
3614 Administrative Services Building
Ames, Iowa 50011-3614
(515) 294-9915
2/8/99
Contacts:
William Edwards, Extension Economics, (515) 294-6161
Treva Blumenshine, Extension Communication Systems, (515)
294-5672
USDA to Reduce Crop Insurance Premiums
AMES, Iowa -- The U.S. Department of Agriculture (USDA) has announced that $400 million will be made available to reduce the cost of crop insurance to farmers by approximately 30 percent. This is in addition to the current subsidy for multiple peril and crop revenue insurance, which reduced the cost of crop insurance to Iowa farmers by 35 percent in 1998, according to William Edwards, Iowa State University Extension economist.
In 1998 Iowa farmers insured about 75 percent of their crop acres, for an average premium cost of $8.42 per acre. "Of this, the producer paid an average of $5.51 and the USDA paid $2.91," Edwards said. "The average amount returned to pay for crop losses was $3.87 per acre or about 70 percent of the farmer cost."
The existing subsidy program reduces farmer premiums by a smaller percent for higher levels of insurance coverage, but the new assistance will reduce premiums by an additional 30 percent for all levels of coverage. "Producers will have the assistance deducted from the premium billings they receive at the end of the growing season. If the total value of payments requested exceeds the appropriated funds, all payments will be reduced proportionately," Edwards said.
For more information, contact your local ISU Extension county office.
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