Booker, Salinas, Blumenauer Introduce Bicameral Bill to Boost Crop Insurance Coverage for Small Farms and Specialty Crop Farms

Legislation would ensure crop insurance agents are fairly compensated for covering small and specialty crop farms.

WASHINGTON, D.C. – Today, U.S. Senator Cory Booker (D-N.J.) and U.S. House Representatives Andrea Salinas (OR-06) and Earl Blumenauer (OR-03) introduced the Insuring Fairness for Family Farmers Act, legislation that would reform federal crop insurance subsidies to better incentivize crop insurance agents to provide coverage to small farms and specialty crop farmers.

Right now, specialty crop farms and small farms have much lower rates of coverage than large, commodity crop farms. This under-coverage is driven by the federal subsidies that provide crop insurance agents with commissions for each policy that they sell. These commissions are currently based on a percentage of the premium of the policy sold. Crop insurance policies for larger farms have larger premiums, strongly incentivizing agents to write policies for the largest farms instead of small farms. In 2022, agents selling the top 3% of largest policies collected an enormous, disproportionate 37% of total agent commissions.

Further, specialty crop farms often require insurance that is more labor-intensive to write and service than commodity crop farms, which means crop insurance agents are dis-incentivized from writing policies for specialty crops, since they are not compensated for the extra time they spend on them.

The Insuring Fairness for Family Farmers Act (IFFFA) would revise how crop insurance agent commissions are calculated to level the playing field for small farms. IFFFA would make agent compensation be based on how much effort selling or servicing the policy requires for the agent. This would level the playing field for farms of all sizes to get assistance from agents and ensure that agents are fairly compensated for writing policies for small farms and specialty crop farms. The bill would also give bonuses to agents who write policies for farms that have not been covered before, and bonuses to those who write policies to cover small farms and certain specialty crop farms. The changes to agent incentives would be revenue-neutral, meaning that the overall amount of incentives going to crop insurance agents would be unchanged. A large majority of agents would see an increase in commissions per policy as a result of this bill.

“Specialty crop farmers and small farmers are not able to take advantage of crop insurance if they are not given the opportunity to understand it and purchase it,” said Senator Booker. “My bill will fix the current inequities in federal subsidies, so that insurance agents are adequately compensated for selling policies to these producers. By ensuring access to crop insurance for all types of producers, we can promote a more resilient agriculture sector.”

“The vast majority of farms in Oregon are small family farms, and crop insurance is one of their most valuable tools against bad weather, natural disasters, and volatile markets,” said Representative Salinas. “Unfortunately, specialty crops have consistently lagged behind commodity crops in crop insurance coverage levels, and small farms are much less likely than large farms to have crop insurance leaving them without a safety net when times get hard. In an ordinary year, 89% of the Farm Bill goes to approximately 150,000 farms, while the other 2 million farms in the U.S. are forced to fight for that remaining 11%. Small family farms are too often left out of the Farm Bill process, despite being the backbone of Oregon agriculture. The Insuring Fairness for Family Farmers Act will help restore fairness to this process and ensure that these farms remain viable not just in the near term, but for years to come.”

“The Farm Bill has historically called fruits, veggies, nuts, and berries ‘specialty crops,’” said Representative Blumenauer. “In Oregon, we call these crops ‘food.’ Farmers who grow them should be able to access adequate insurance coverage to guard against disaster. I appreciate Congresswoman Salinas’ partnership on this issue.”

“American farmers of all sizes deserve a strong, robust safety net that allows them to withstand tough years, keeping them on their land so they can feed their neighbors and their communities,” said Joe Van Wye, Policy and Outreach Director at Farm Action Fund. “Unfortunately, as it stands today, the federal crop insurance program incentivizes agents to provide the lion’s share of policies to the largest farms, often at the expense of fruit and vegetable growers who struggle to secure insurance. We applaud Senator Booker and Representatives Salinas and Blumenauer and urge passage of their ‘Insuring Fairness for Family Farmers Act’ so that federal crop insurance will work better for the family farmers and specialty crop growers who need it the most.”

“[This bill] prompts an important question about why some farmers are able to access crop insurance easily and others are effectively shut out of the program. We often hear from beginning, small, and specialty crop farmers who cannot find an insurance agent willing to tailor a policy to their operation because of the additional time required and the lower return. The idea driving this bill can help close the coverage gap and insure the diversity of American agriculture against worsening weather events,” said Billy Hackett, Policy Specialist at the National Sustainable Agriculture Coalition.  

The legislation is supported by the following organizations: Farm Action Fund, National Sustainable Agriculture Coalition, Environmental Working Group, Taxpayers for Common Sense, National Resource Defense Council, Sierra Club, Ohio Ecological Food and Farm Association.

The bill is cosponsored by U.S. Senator Richard Blumenthal (D-CT) and Senator Welch (D-VT).

The full text of the bill can be found here.