REMARKS BY RMA ADMINISTRATOR ELDON GOULD
at the Independent Farm Agents of Illinois Winter Meeting
Crowne Plaza Hotel, Springfield, IL
Feb 3, 2006

It is a great pleasure to be here this morning for your winter meeting. I’d like to thank Phil Lackman and Kevin Beck for inviting me to speak here today.

I am the Administrator of the USDA’s Risk Management Agency. The Risk Management Agency (RMA), via the Federal Crop Insurance Corporation (FCIC), oversees and administers the crop insurance program under the Federal Crop Insurance Act.

Crop insurance is the government’s principal means of helping farmers survive a major crop loss. It is also extremely useful to agricultural producers even when it is not paying on losses because it enables them to get loans approved, helps them aggressively market a portion of your crop and lets them plan more reliably for their future.

Last year marked a major milestone for the crop insurance program. We celebrated the 25th anniversary of the Federal Crop Insurance Act of 1980, which created the unique partnership between private insurance companies and the Federal government within the crop insurance program.

Crop insurance is offered to qualifying producers through 16 private sector crop insurance companies. Under the renegotiated Standard Reinsurance Agreement (SRA), RMA provides reinsurance, pays premium subsidy, reimburses insurers for administrative and operating costs and oversees the financial integrity and operational performance of the delivery system. RMA bears much of the non-commercial insurance risk under the SRA, allowing insurers to retain commercial insurance risks or reinsure those risks in the private market.

The program has experienced extraordinary growth in the last quarter century. Through the private sector delivery system, the Federal crop insurance program in 2005 provided producers with over $44 billion in protection on approximately 246 million acres through about 1.2 million policies. There are 22 plans of insurance available and nearly 30 new insurance products under various stages of evaluation or development. Approximately 80 percent of acres of major program crops are insured, with many at higher levels of coverage.

The roles of crop insurance and RMA have evolved over the years, but our mission remains the same – to promote, support and regulate sound risk management solutions to preserve and strengthen the economic stability of America’s agriculture producers.

Educating our nation’s producers to inform them of good risk management practices and tools is essential to accomplishing this mission. Crop insurance is an integral part of any farm or ranch risk management plan, but can sometimes be complicated. It’s not always easy to get useful information in the hands of limited-resource farmers and ranchers. However, RMA has become a leader at USDA at providing this type of outreach. We want to make sure that small and limited resource farmers are exposed to the products and services available to help them survive and thrive in agriculture. Our regional offices meet numerous times through out the year with farmers and producer groups to help folks understand how to use this valuable tool.

We are particularly proud of our successful education and outreach partnership agreements. Using them, we reach producers with the best risk management information possible through farm organizations, universities, community-based organizations, commodity groups and states. Last year, RMA awarded millions in partnership agreements to partners in qualified public and private organizations, community based organizations, universities, grower groups and others to develop risk management tools and provide outreach and education opportunities to small, limited resource, women and minority farmers and ranchers.

Other agreements were awarded for the research and development of new non-insurance risk management tools, crop insurance education for producers in underserved states, and commodity partnership programs. One such commodity partnership includes a grant for $150,000 to the University of Illinois for mitigating risks on Illinois livestock and grain farms. The partnership aims to provide training to priority commodity producers including forage, vegetable, nursery, swine, dairy and beef producers in managing risks by meeting production, market and long-run financial objectives.

As we look ahead, there are several areas that RMA would like to improve upon. These include:

• Expanding Participation in the Federal Crop Insurance Program;
• Improving Outreach and Education;
• Using Technology to Improve Program Performance and Integrity;
• Simplifying and Expanding Risk Management Products and Tools; and
• Simplifying FSA/RMA Reporting Requirements

While RMA has many successful products that cover a wide range of crops, we recognize the need for improvement. I encourage you to provide RMA with feedback. Let us know the best way to help you producers with their risk management needs. Tell us what works and what doesn’t or how products or communication can improve. This is a vital part of providing the best risk management tools.

The Bush Administration has made the federal crop insurance program the cornerstone of a stronger farm safety net. We at the Risk Management Agency are committed to the continuing transformation of this important program into a broad-based safety net for farmers and ranchers. We will do our best to make sure that all American agricultural producers remain solid, solvent, and competitive.