Congressman Eric Sorensen Announces New Legislation to Lower Prices for Illinois Farmers

WASHINGTON, DC - Today, Congressman Eric Sorensen announced the introduction of the Fair Premiums for Farmers Act, legislation he authored to help ensure farmers in the Midwest pay crop insurance rates applicable to their actual risk of production.

"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," said Congressman Eric Sorensen. "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. My legislation is an important step forward in righting this wrong, ensuring fair crop insurance rates for all farmers, and helping to lower costs for farmers across the board."

The Department of Agriculture's Risk Management Agency (RMA) sets rates for insurance policies in the Federal Crop Insurance Program (FCIP). Loss ratios measure the financial performance of the program and are determined by dividing the indemnities paid to policyholders by the total amount of premiums collected for the policies sold within the year.

By law, RMA must administer the FCIP in a manner that is actuarially sound, meaning the total premiums paid by farmers over time must roughly equal the total value of indemnities paid out for confirmed losses. Additionally, RMA is also required to periodically review rating methodology.

Unfortunately, the current system can often produce wide disparities in loss ratios for certain states and commodities. Midwest soybeans produced in states like Indiana, Iowa, Ohio, Nebraska, Missouri, Wisconsin, and Illinois have experienced very low 10-year loss ratio averages-some nearly one-quarter the average. As a result, farmers in these states are overpaying for their policies in comparison to farmers in other regions where loss ratios are considerably higher.

To address this, the Fair Premiums for Farmers Act would:

• Direct RMA to complete a study on loss ratios for all covered commodities under the FCIP by state and commodity to identify the policies and plans which contribute to high loss ratios.
• Direct RMA to analyze extreme weather events which account for various levels of loss.
• Require RMA to publish, and make available for public comment, a report of the findings, including a proposed plan to remedy disparities in loss ratios within three years.

Read the full text of the legislation here.

Addressing loss ratios for farmers in Illinois has long been a top priority for Congressman Sorensen, and he recently joined a letter with Senator Durbin, Senator Duckworth, and Congresswoman Budzinski on this issue.

To learn more about Congressman Sorensen's work on behalf of farmers-and all of his neighbors-visit his website here.

Congressman Eric Sorensen represents Illinois' 17^th District in the United States House of Representatives. Prior to serving in Congress, Sorensen was a local meteorologist in Rockford and the Quad Cities for more than 20 years. His district includes Illinois' Quad Cities, Rockford, Peoria, and Bloomington-Normal.

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