Illinois And Midwestern Farmers Are Overcharged On Crop Insurance, Say Durbin, Duckworth, Budzinski, Sorensen, Call For USDA To Recalculate And Provide Refunds

Illinois And Midwestern Farmers Are Overcharged On Crop Insurance, Say Durbin, Duckworth, Budzinski, Sorensen, Call For USDA To Recalculate And Provide Refunds

As farmers face sky-high costs, the lawmakers say USDA Risk Management Agency must rebalance premium costs and refund Illinois and Midwestern farmers

SPRINGFIELD - U.S. Senate Democratic Whip Dick Durbin (D-IL), a member of the Senate Committee on Agriculture, Nutrition, and Forestry, and U.S. Senator Tammy Duckworth (D-IL), along with U.S. Representatives Eric Sorensen (D-IL-17) and Nikki Budzinski (D-IL-13), both members of the House Agriculture Committee, today sent a letter to the Administrator of the U.S. Department of Agriculture (USDA) Risk Management Agency, calling for a review of the Federal Crop Insurance Program to rebalance payments for farmers that are routinely overcharged for federal crop insurance premiums. While the Federal Crop Insurance Act requires crop insurance premiums to roughly equal the indemnity payouts over the long term, Illinois corn and soybean farmers have been systemically overcharged for crop insurance premiums as they rank among the lowest in the nation for crop insurance payouts.

"Farmers face record costs for farm inputs, including diesel, fertilizer, seed, and equipment. As policymakers explore options for relief, we ask USDA to begin a targeted review as soon as possible of the counties and crops that have consistently been overcharged in the Federal Crop Insurance Program, and to accordingly reduce those crop insurance premiums," the lawmakers wrote. "We also request that once an adjustment has been made, that USDA consider refunds to those farmers for the current crop year, and make the full correction at once to avoid prolonging this overcharging."

As the lawmakers note, Illinois and Midwestern corn and soybean farmers have been overcharged by the Federal Crop Insurance Program as their long-term loss ratios are far below the target 1.0 loss ratio for the program. This has been documented by the University of Illinois in analyses from 2023, 2024, and two additional reports this year. New analysis from North Dakota State University (NDSU) requested by Durbin in August has shown that 10 Midwestern states, including Illinois, have long-term loss ratios far below 0.80, which means that for every dollar that Midwestern farmers have paid in premiums, less than 80 cents have gone back to them in indemnities over time. An adjustment in the Federal Crop Insurance Program to account for Midwestern farmers' low loss ratios would provide an 11 percent decrease in premium costs for Midwestern farmers, including a 22 percent decrease for corn and a 19 percent reduction for soybeans.

The lawmakers urged USDA to immediately review the premiums rates to stop Illinois and Midwestern farmers from paying unnecessarily high costs for such a critical program.

"USDA has the authority to undertake this review and adjustment…While the USDA Risk Management Agency (RMA) reviews premium rates on a rotating schedule across crops, this process has not been enough to prevent this significant overcharging of Illinois and Midwestern corn and soybean farmers," the lawmakers wrote.

They continued: "As most farm groups have repeatedly said, crop insurance is the most important risk management tool. Farmers appreciated USDA's decision to delay the due date for premiums this year to give farmers temporary relief. Yet, the real issue within crop insurance affordability and cash flow, is that farmers of certain crops and farmers in certain regions are being systemically overcharged."

The lawmakers concluded their letter by underscoring that the Trump Administration's short-sighted trade policies and war of choice in Iran have pushed farming costs sky-high, putting undue economic stress on farmers. Durbin, Duckworth, Sorensen, and Budzinski make clear that this adjustment to the Federal Crop Insurance Program would deliver critical, and deserved, relief to Midwestern farmers.

"Farmers are facing the prospect of future years of economic harm. There is a major drop in agricultural export demand due to tariffs and international conflicts. On-farm diesel costs are up by 80% over the past year, more than the on-the-road diesel prices at the pump. USDA's own September Farm Sector Income Forecast shows that the aggregate cost of production is up $21.2 billion to nearly $493 billion," the lawmakers wrote.

"We urge you to help farmers confronting this affordability crisis by addressing this long-standing issue of better aligning crop insurance premiums with risk, which would have the effect of cutting premium costs for thousands of farmers," the lawmakers concluded their letter.

A copy of the letter can be found here and below:

November 6, 2026

Dear Administrator Swanson:

Farmers face record costs for farm inputs, including diesel, fertilizer, seed, and equipment. As policymakers explore options for relief, we ask USDA to begin a targeted review as soon as possible of the counties and crops that have consistently been overcharged in the Federal Crop Insurance Program, and to accordingly reduce those crop insurance premiums. We also request that once an adjustment has been made, that USDA consider refunds to those farmers for the current crop year, and make the full correction at once to avoid prolonging this overcharging.

USDA is required by law to target a 1.0 loss ratio for federal crop insurance, which means total insurance premiums should roughly equal indemnity payouts over the long-term. Unfortunately, this has not been the case for Illinois and Midwestern corn and soybean farmers, who are systematically overcharged for crop insurance premiums and have been for years. This has been substantially documented by several economic reports by the University of Illinois at Urbana-Champaign. Another recent analysis from North Dakota State University (NDSU) again shows that 10 Midwestern states have long-term loss ratios far below 0.80, which means that for every dollar that Midwestern farmers paid in premiums, less than 80 cents has gone back to them in indemnities over time. An NDSU simulation to bring these extremely low loss ratios closer to 0.80-still below the target of 1.0-and starting with the lowest counties first, would cut what farmers are being overcharged by $762 million per year, including more than $10 million in each of the 12 Midwestern states. A USDA adjustment of this nature would provide an 11% decrease in premium costs for Midwestern farmers, including a 22% decrease for corn and a 19% reduction for soybeans.

USDA has the authority to undertake this review and adjustment. Section 508(i) of the Federal Crop Insurance Act directs the Federal Crop Insurance Corporation to periodically review its rating methodologies, analyze rating and loss history by area, and adjust premium rates it determines are excessive for an agricultural commodity in an area. While the USDA Risk Management Agency (RMA) reviews premium rates on a rotating schedule across crops, this process has not been enough to prevent this significant overcharging of Illinois and Midwestern corn and soybean farmers.

As most farm groups have repeatedly said, crop insurance is the most important risk management tool. Farmers appreciated USDA's decision to delay the due date for premiums this year to give farmers temporary relief. Yet, the real issue within crop insurance affordability and cash flow, is that farmers of certain crops and farmers in certain regions are being systematically overcharged.

Farmers are facing the prospect of future years of economic harm. There is a major drop in agricultural export demand due to tariffs and international conflicts. On-farm diesel costs are up by 80% over the past year, more than the on-the-road diesel prices at the pump. USDA's own September Farm Sector Income Forecast shows that the aggregate cost of production is up $21.2 billion to nearly $493 billion. Analysis by the American Farm Bureau Federation found, despite increased prices for some commodities, that farmers are expected to operate below breakeven and could potentially be underwater into the 2027 crop year as the disruptions continue.

We urge you to help farmers confronting this affordability crisis by addressing this long-standing issue of better aligning crop insurance premiums with risk, which would have the effect of cutting premium costs for thousands of farmers. Thank you for your consideration of this request.

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