GAO Report Confirms Need for Crop Insurance Reform


The Government Accountability Office is recommending that Congress consider directing the Department of Agriculture to adjust the expected rate of return for crop insurance. In 2010, USDA negotiated with insurance companies to set a 14.5 percent target rate. According to GAO’s analysis, the reasonable rate of return declined, averaging 9.6 percent.

Congressman Ron Kind of Wisconsin says there is no reason to offer a 14 percent guaranteed rate-of-return…

“Most of the things that I’ve been saying in recent years about the need to tighten up the program with some common sense reforms, but still maintaining it, because I do believe that our farmers need this important risk management tool; crop insurance.  But, I’ve been saying for a while, that it makes no sense for us in this program to be offering the private crop insurance companies a 14% profit margin.  We’re not offering that to any other business in this country.”            

Kind says additional changes need to be made to benefit family farmers, changes included in a bill he is proposing…

“I would also like to means test this a little further so that all the premium subsidy payments aren’t going to huge agri-business, but family farmers and make it easier to afford the crop insurance coverage that they need, and that’s exactly what my reform bill calls for, that I’ve teamed up with Jim Sensenbrenner on, and this GAO report confirms what I’ve been saying the whole time. 

“I’m anticipating bi-partisan report for these common sense changes to crop insurance while retaining this important program for our farmers.” 

Kind also says the program has to be transparent…

“I’ve got to be an important steward for the taxpayer dollar, and make sure that it’s accountable and it’s transparent.  The other thing that I’m calling for in the legislation is our ability to track where these subsidy payments are going.  Right now, that’s against the law.   So, you can’t even track with great certainty who’s receiving it and in what amount.  If you’re going to be receiving tax payer dollars you’ve got to expect that that information is available to the general public, because it’s their money.

“And how are we supposed to make sure that these programs are implemented efficiently and cost effectively if we don’t know where the dollars are going, and who’s receiving it and what amount.  This is essential to good governance.  And the American public deserves to know where those dollars are going.”  

U.S. Representative Ron Kind, from Wisconsin’s Third District.


A native of the Texas Panhandle, Rhonda was born and raised on a cotton farm where she saw cotton farming evolve from ditch irrigation to center pivot irrigation and harvest trailers to modules. After graduating from Texas Tech University, she got her start in radio with KGNC News Talk 710 in Amarillo, Texas.