Risk Management Agency's Inconsistent Practices Cost Farmers by Jeff Todd and Spencer Smith

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This Article first appeared in The Agricultural Law Update, March 2008.

The Risk Management Agency (RMA), a division of the United States Department of Agriculture that administers the government’s federally reinsured crop insurance program, has yet to settle on a consistent practice for determining the payouts under certain policies. For the 2006 crop year, RMA has interpreted the payment obligations of the Group Risk Income Protection (GRIP) plans of insurance at least three different ways – all to the detriment of west Texas insureds. In each situation, RMA has taken positions contrary to the insured farmers’ interests. The result being (1) erroneously low indemnity payments that clearly contradict the express terms of the policies, (2) improper requests by insurance companies for reimbursement of indemnity payments, and (3) costly litigation.

Article authored by McAfee & Taft attorneys: Jeff Todd and Spencer Smith.

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