Risk Management Agency officials release reorganization plan
February 6, 2018
PHOENIX — Heather Manzano, the acting administrator of the Agriculture Department's Risk Management Agency, officially informed the crop insurance industry that the Trump administration is establishing a new administrative division in the Farm Production and Conservation mission area.
The FPAC Business Center, which will have the same rank as RMA, the Farm Service Agency and the Natural Resources Conservation Service, will handle information technology and other services for all three agencies, Manzano said.
Another reason for creating the FPAC Business Center is to avoid sending "mixed messages" to the customers of the various agencies in FPAC, she said.
Agriculture Secretary Sonny Perdue has said the U.S. Department of Agriculture will be fact-based, data-driven and customer-focused, Manzano said, adding that she believes RMA already fulfills those goals.
The last year was challenging with the floods in Arkansas, the droughts in the upper Midwest, Hurricanes Harvey and Irma and the wildfires in California, but "undoubtedly we rose to that occasion," she said.
RMA's loss ratio for the crop insurance program in crop year 2017 is 0.44, she said.
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A loss ratio is computed by the amount of payments made on crop insurance policies divided by the total premium paid for policies. A loss ratio of 1.0 means that crop insurance payments equal total premiums. Ratios above 1.00 indicate that payments exceed premiums, which occurs with some frequency. Loss ratios below 1.00 indicate that payments are less than premiums.
During the last 10 years, loss ratios averaged 0.81 for all crop insurance policies in the federal crop insurance program, according to Farm Doc Daily, a University of Illinois publication. Since 2007, the highest loss ratio of 1.59 occurred in the 2012 drought year. Since 2012, loss ratios declined: 1.04 in 2013, 0.92 in 2014, 0.67 in 2015, and 0.41 in 2016.
Manzano also noted RMA's improper payment rate fell to 1.96 — one of the lowest in federal government.