See RMA national maps for the annual allocation of allowances paid at the district level of www.rma.usda.gov/data/indemnity/index.html. RMA, Policies, www.rma.usda.gov/policies/. See also Iowa State University Extension Ag Decision Maker, Yield Protection Crop Insurance, file A1-52, www.extension.iastate.edu/agdm/crops/html/a1-52.html. Since the previous SRA`s A-O repayments were based on a percentage of premiums, their dollar amount has increased sharply in recent years, as premiums have increased to reflect higher crop prices. The A-O repayment increased from an average of $881 million in fiscal 2004-FyG2006 to $1.6 billion in 2009. Similarly, the insurance profits of companies (a company`s share of the premiums withheld exceeds its allowances) have increased considerably in recent years, with weather conditions generally favourable to crop culture. Some have argued that the average cost to taxpayers would decrease if the government`s share of profits was increased in exchange for a greater share of government losses. The insurance industry argued that a specific SRA provision (“net quota”) was a tax on insurance income and supplanted private reinsurance. See RMA Standard Reinsurance Agreement Fact Sheet auf www.rma.usda.gov/news/2010/06/610srafactsheet.pdf.
Notes: During the 2016 reinsurance year, the three largest IPAs were, after a direct written premium, the ACE American Insurance Company (Rain and Hail, LLC), Rural Community Insurance Services and NAU Country Insurance Company. Together, they wrote about 47% of all federal premiums for pre-reinsurance crop insurance. See Insurance Information Institute, “Top 10 Writers of Multiple Peril Crop Insurance by Direct Premiums Written, 2016,” www.iii.org/article/background-on-crop-insurance. On June 10, 2010, the USDA announced the release of the draft final agreement (subject to technical review). 30 On July 13, 2010, the USDA announced that all approved plant health insurance has signed the new SRA and is taking effect for the reinsurance year beginning July 1. 2010.31 USDA estimates that the new SRA reduces federal cultural insurance spending by $6 billion over 10 years, Using the government`s basic plan of February 2010.32 The Department stated that $4 billion in savings would be spent on deficit reduction and US$2 billion on risk management and conservation programs, including the extension of the pasture, land and forage insurance program and a rebate for producers. USDA notes that the new agreement generally maintains the previous SRA`s A-O subsidy structure, but removes the possibility of “wind-in” government payments based on peak commodity prices33 Although insurance companies have signed the agreement, the insurance industry remains concerned about the potential impact of reduced funding on the overall supply of the program and on the quality of services to producers. Prolonged drought in the Midwest and West, coupled with a lack of structural, cultural and vegetative water conservation, led to severe wind erosion in the early 1930s.
These conditions continued for several years, resulting in severe dust storms, millions of tonnes of land loss and persistent environmental damage that made national headlines. The term dust shell is commonly used to describe this state and timing, as well as areas affected by Colorado, Kansas, New Mexico, Oklahoma and Texas. For more information, see Douglas Helms, “Readings in the History of the Soil Conservation Service,” USDA, 142, www.nrcs.usda.gov/Internet/FSE_DOCUMENTS/stelprdb1043484.pdf. At the end of 2009, RMA began renegotiating the SRA created in 2004. Prior to the negotiations, some had criticized the fact that it was too generous for insurance companies after a significant increase in government costs in recent years, in part because of rising crop prices.