USDA's Risk Management Agency (RMA) has published a proposed rule in the Federal Register that would reward farmers participating in the federal crop insurance program for good performance.

"This proposed Good Performance Refund will benefit qualifying farmers and ranchers across rural America and strengthen the Federal crop insurance program," said William J. Murphy, RMA administrator. "It encourages producers to use the best available management practices in order to qualify for the refund in future years and rewards good performance by returning a portion of the out-of-pocket costs paid for crop insurance premiums back to those who have paid into the program and have had limited or no losses."

Under the proposed program, payment amounts would vary by producer and will be based on each qualified producer's history in the program. RMA estimates that the average refund amount per producer this year will be about $1,000. The program has a proposed maximum limit at $25,000, with a minimum payment of $25. The first year of the proposed program will use data from 2009 and prior crop years because not all 2010 data is finalized.

RMA expects that the proposed Good Performance Refund program will provide producers in rural America with about $75 million this year in crop insurance refunds. It is estimated that the proposed program would benefit farmers and ranchers in over two-thirds of counties nationwide.

The proposed program is made possible by the savings realized from the Obama Administration's recent Standard Reinsurance Agreement negotiation between the Federal Crop Insurance Corporation and the private insurance industry.

The proposed rule in the Federal Register has a 15-day comment period that ends January 21, 2011. This notification is intended to give the public an opportunity to review the proposed rule and prepare comments to be submitted during the comment period. The proposed program is intended to be available before the spring planting season.

The Federal Register notice is accessible at http://origin.www.gpo.gov/fdsys/pkg/FR-2011-01-06/pdf/2011-14.pdf. RMA encourages any comments or submission of opinion on this matter.