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Clearly, the participation goals that were contemplated and hoped for by inclusion of the premium reduction plan provisions in the 1994 law have been achieved without those provisions having been implemented or necessary. Consequently, enacting regulations now to implement the premium reduction plan provisions of the law, given the subsequent changes in the A&O subsidy percentages and in the program itself, is likely to be extraordinarily disruptive and even threatening to the success of the present program’s achievements. It is clear that premium reduction plans have not been necessary to achieve the current participation levels, and there is no need now to formalize a rule to implement what has proven to be an unnecessary provision of the law.

Price Competition Creates an Un-Level Playing Field for Farmers

For the entire history of the Federal Crop Insurance Program, the program has been based on the premise that the government sets the price the farmer pays, and the price the farmer pays is identical to what other farmers with identical circumstances pay. This concept has been consistent with the public policy goal of universal availability on a non-discriminatory basis to all growers. Another principle of the universal availability policy is that it should not matter, from a premium cost standpoint, where or from whom a grower purchases his coverage – in other words, price competition should not be and has not been a factor that has complicated the farmer’s purchasing decision.

Premium reduction plans will change this basic program principle by creating a situation under which it will matter from whom a farmer buys his policy, as the price he pays could and will likely vary from agent to agent and company to company.

It is our contention that this significant departure from the long-time public policy goals of universal availability on a price-neutral basis of the crop insurance program will create confusion, erode farmers’ confidence in the protection and reduce the perceived value of the protection to a “cheapest price” commodity. This will distract farmers from the important risk management decisions they must make in choosing the best coverage for their farm. We believe price competition is simply inconsistent with the public policy premise of universal availability on a basis that treats all similarly situated producers equally.

The Proposed Rule Creates an Un-Level Playing Field for Companies

The proposed rule discriminates against established companies that are operating on a nationwide basis and that are not "cherry-picking" business by writing in only limited geographic areas. Conversely, the proposed rule favors companies that operate in limited areas. Those limited areas are generally the most profitable areas from an underwriting standpoint, and are thus the most desirable areas to try to implement a premium reduction plan in an effort to gain market share. The proposed rule also would favor start-up operations that have no track record of performance

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