Crop Insurance Continues Expansion While Improper Payment Rate Falls

The federal crop insurance program can celebrate several successes, but one of the biggest comes from reducing the improper payment rate by more than 50 percent, said Brandon Willis, administrator of USDA's Risk Management Agency(RMA).

For 2015, Willis said the improper payment rate was 2.20 percent, down from 5.58 percent in 2014. USDA's improper payment rate was 5.02 percent in 2014 and the federal government's was 4.02 percent.  

“The spotlight on crop insurance will continue to grow, but this demonstrates crop insurance can withstand it,” Willis told attendees at the Crop Insurance Industry Annual Convention here. “This is a well-run program.”

An improper payment occurs when funds go to the wrong recipient, the right recipient receives the incorrect amount of funds (including being paid too much or too little), documentation is not available to support a payment, or the recipient uses funds in an improper manner.

Not all improper payments are the result of fraud, but on Capitol Hill, a high improper payment rate for any program usually generates additional scrutiny and criticism from lawmakers and budget analysts. For crop insurance, Willis said over 50 percent of the errors are related to acreage reporting and production records.