Crop Insurance Program Integrity Continues to Improve

Crop insurance’s already-low improper payment rate — a closely-watched standardized measure of waste and efficiency – improved again in 2018.

Martin Barbre, Administrator of the USDA’s Risk Management Agency (RMA), delivered the good news this week while addressing the crop insurance industry’s annual convention.

The FY2018 rate of 1.81 percent marked the fourth consecutive year it declined, falling from 2017’s 1.96 percent and 2.02 percent and 2.20 percent in 2016 and 2015. The USDA and private-sector insurers made program integrity improvement a top priority following an improper payment rate of more than 5 percent in 2014.

“RMA has continued to improve program integrity for federal crop insurance through an effective public-private partnership with our Approved Insurance Providers,” Barbre said.

Improper payments occur when funds go to the wrong recipient; when the correct recipient receives too little or too much; or when the recipient uses funds in an improper manner. Many errors are simply rooted in data entry and reporting mistakes.

The government closely monitors improper payments for all major federal spending programs, and the last time a government-wide figure was posted, it was twice as high as crop insurance’s rate.

Tom Zacharias, the president of National Crop Insurance Services, which sponsored this week’s meetings, said the news illustrates the power of the crop insurance system’s unique public-private partnership and is a testament to investments made in recent years.

“Crop insurers enjoy a tremendous partnership with the USDA, and we work closely together to ensure that we are good stewards of taxpayer dollars and are constantly improving efficiencies for America’s farmers and ranchers,” he said.

Zacharias noted that the partnership fosters investment in data collection, education and training, monitoring and new research and technology to continually improve.

“In addition to the USDA’s hard work, the private sector is spending millions every year to maximize program integrity,” he concluded. “This new data is proof that crop insurance is a highly efficient, well-run public-private partnership.”