PIA Urges RMA to Reinstate Inflation Adjustment for Crop Agents

PIA, along with other agent groups, including the Crop Insurance Professionals Association, sent a letter today to the Risk Management Agency (RMA) urging them to reinstate an inflation adjustment for crop insurance agents.

Last fall, PIA and our allies successfully advocated for the inclusion of crop provisions in the year-end federal government appropriations package, known as an omnibus. The provisions included in the 2022 year-end omnibus acknowledge the need for the federal government to alleviate economic challenges that have faced crop insurance agents for years.

The 2011 Standard Reinsurance Agreement (SRA), which is the contract between the Federal Crop Insurance Corporation and crop insurers, established a broadly applicable cap on the administrative and operating (A&O) expense subsidy. To make matters worse, beginning in 2016, the RMA stopped making annual inflation adjustments to the total A&O subsidy cap, leaving its value fixed in 2015 dollars, where it remains today. 

These actions resulted in effective cuts to agent commissions, during a historically challenging time for crop insurance agents. 

The provisions included in the 2022 omnibus begin to address this problem confirming in the accompanying report that the RMA has the legal authority to reinstate the inflation adjustment without renegotiating the SRA.  The inclusion of this language makes clear Congress’s view that the RMA can reinstate the A&O inflation adjustment for all crop agents.

PIA will continue to urge the RMA to respect the view of Congress and reinstate the inflation adjustment for crop agents and, if necessary, ask Congress to address the issue in the upcoming Farm Bill process.