Cotton Council Says Its 'Persistence' Led to Rate Reduction

November 30, 1999

The National Cotton Council says its "persistence" led to a rate study the helped bring significantly lower federal crop insurance rates next year for many cotton producers. The average rate reduction in the mid-South is about 28% and in the far West about 9%.

In some counties USDA's Risk Management Agency reduced rates by as much as half. The rate reductions came after the NCC argued that the current cotton rating systems in the two regions were invalid because of historically low producer participation in RMA's cotton crop insurance program.

Studies, initiated as a result of legislation, revealed that the current rates in the two regions were excessive and did not reflect the actual risk of growing cotton. As a consequence, cotton crop insurance was unable to provide most producers with an effective risk management tool because of its excessive cost, says NCC.