“We have to make certain that risk management products do what they’re supposed to do,” says Ross Davidson, RMA administrator, who discussed goals for the agency at the third annual Texas Commodity Symposium in Amarillo.
“We need a fair and effective delivery system,” Davidson said. “And we want to improve consistency among insurance agencies, provide them a better base of knowledge. RMA is the regulator and will help companies identify and resolve weaknesses in programs.”
Davidson said RMA helps farmers and ranchers find efficient, market-based risk management solutions. “Most products are based on insurance but we go beyond that,” he said. “We have 60 products on the drawing board, including some designed for specialty crops.”
He said an agency redesign will improve efficiency. “We also want to improve decision-making so that selections are based on strategic information. We’ll take a hard look at the products and make sure they meet the needs of the market.
“Better communication, both internal and external, encourages better relationships among all parties involved in risk management, from farmers, to insurers to the USDA.”
Davidson said one critical goal is to eliminate abuse and fraud. “We have to remove the bad apples, and we know that most farmers and ranchers are honest.”
He said a consistent overview of program functions and products available will help limit abuses. “We certainly don’t want products in the program that invite abuse and fraud,” he said.
The program has been good for Texas, Davidson said. “Texas producers have received some $350 million in benefits and have paid $100 million in premiums.”
Farmers pay for only a portion of the benefits and the government subsidizes part. “That’s why we have to deal with fraud and abuse,” he said.
“Informed customers and stakeholders will be key in maintaining integrity in this program. With a number of choices available, information is crucial.”