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Crop Insurers Piling Up Record Profits

Baccus, president of the Kansas Farm Bureau and chairman of the Farm Bureau Mutual Insurance Co., the Iowa firm that now owns Crop 1, said its plan saved farmers "over $4 million and has a 94 percent retention rate."

In February 2005, federal regulators received about 800 letters in response to a request for comments on the Crop 1 plan. The majority were from crop agents and insurance officials denouncing it. In some instances, the letters were identical except for the name. Four arrived from farmers in Kansas, one of whom was Landon Koehn of Marienthal.

When a reporter contacted Koehn, he said he didn't remember the letter. But after a reporter read him its contents, he responded, "I can tell you this honestly: I didn't write this letter," adding, "I would know if I did."

Later in 2005, Rep. Jack Kingston, a Georgia Republican and former insurance agent, successfully introduced language in a House appropriations bill to derail Crop 1's discount plan by essentially prohibiting government funds from being used in the Premium Reduction Plan.

In May, the Independent Insurance Agents and Brokers of America, known in the industry as "Big I," awarded Kingston its Gerald Solomon Legislator of the Year Award. "Congressman Kingston has been a true friend to independent insurance agents," Big I chief executive Robert A. Rusbuldt said at the time.

In an interview, Kingston said he offered the provision because "small farmers weren't being served" by the discount plan.

During final House-Senate negotiations last fall, Sen. Conrad Burns (R-Mont.) offered language similar to Kingston's that was approved by the conferees and passed by Congress, Burns spokesman James Pendleton said.

"Senator Burns was supportive of the concept," Pendleton said. "But his rationale was that the premium reduction program wasn't working. It was a bait and switch. There was no guarantee that farmers would get a reduction in their premium in the end."

In February, the American Association of Crop Insurers hosted Burns as its main speaker and sponsored a fundraiser for him at the Grande Resort Hotel in Naples, Fla. The event raised $15,000, according to McLeod, the association's director and a former chief counsel of the Senate Agriculture Committee.

The association's political action committee has contributed $9,315 to Burns during the current campaign cycle, the largest donation to Burns from any agriculture group, according to the campaign watchdog group PoliticalMoneyLine.

Research editor Alice Crites contributed to this report.

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