WASHINGTON, D.C. – Illinois Congressman Eric Sorensen is introducing new legislation aimed at lowering crop insurance costs for farmers across the Midwest.
Sorensen announced Thursday the introduction of the Fair Premiums for Farmers Act, which would require a federal review of crop insurance rates to determine whether farmers are paying premiums that accurately reflect their risk of crop losses.
The legislation targets disparities in the Federal Crop Insurance Program, which provides insurance coverage to farmers against agricultural losses.
According to Sorensen’s office, farmers in Illinois and several other Midwestern states have historically paid more in crop insurance premiums relative to the claims they receive compared with farmers in other regions.
“At a time when they already face record-high costs for farm inputs—including diesel, fertilizer, seed, and equipment—we need to do everything we can to lower costs for our farmers,” Sorensen said.
The congressman argues that current insurance rates effectively require some Midwestern farmers to subsidize higher-risk agricultural operations elsewhere in the country.
The U.S. Department of Agriculture’s Risk Management Agency oversees the Federal Crop Insurance Program and establishes insurance rates.
One measure used to evaluate the program is the loss ratio, which compares the amount paid to farmers for insured losses with the total premiums collected.
Sorensen’s office says soybean producers in states including Illinois, Iowa, Indiana, Missouri, Nebraska, Ohio and Wisconsin have experienced particularly low average loss ratios over the past decade.
Under the proposed legislation, the Risk Management Agency would be required to:
- Conduct a study of crop insurance loss ratios by state and commodity to identify policies contributing to significant disparities.
- Examine the effects of extreme weather events on agricultural losses.
- Publish its findings and seek public comment on a proposed plan to address disparities in loss ratios within three years.
Sorensen says the goal is to ensure insurance premiums more closely reflect the actual risks farmers face.
“For too long, farmers in the Midwest, especially in Illinois, have been forced to pay higher crop insurance rates as a way of subsidizing farmers in other parts of the country,” Sorensen said.
The proposal builds on previous efforts by Sorensen to address crop insurance costs.
He recently joined Illinois Senators Dick Durbin and Tammy Duckworth, along with Congresswoman Nikki Budzinski, in raising concerns about loss ratio disparities.
The Fair Premiums for Farmers Act has been introduced in Congress but has not been enacted. The legislation would require federal analysis and recommendations rather than immediately reducing farmers’ insurance premiums.
