Under the SRA and cuts specified in the 2008 farm bill, the reimbursement rate for A&O expenses averaged 18% of total premiums in 2009. 16 This means that for every $100 in premiums collected, the companies receive a reimbursement of $18 from the federal government. The reimbursement rate varies by insurance product, depending on whether it is for a yield-based or a revenue insurance product. The SRA places a maximum for A&O reimbursements at $ billion per year (adjusted annually for inflation) and a minimum at $ billion. The cap controls government costs when crop prices rise (price levels directly.
