FARGO, N.D. — August 8, 2025 — A new white paper from the Agricultural Risk Policy Center (ARPC) at North Dakota State University analyzes more than a decade of Federal Crop Insurance Corporation (FCIC) interest deferrals on unpaid premiums, showing that while these waivers provide critical liquidity for farmers after disasters, they also push short-term financing costs onto the federal government.

The white paper, “When Disaster Strikes the Billing Date: A Scoping Review of Crop Insurance Interest Deferrals” by Dr. Francis Tsiboe and Dr. Sandro Steinbach, examines FCIC’s use of 60-day interest waivers since a 2012 policy change that moved the billing date to Aug. 15. From 2019 to 2023, more than $18 billion in interest on unpaid premiums were deferred, amounting to an implicit subsidy of roughly $510 million, the paper estimates. The deferrals delay federal receipts and potentially increase short-term Treasury borrowing.

According to the review, repeated waivers appear to lower the effective cost of insurance, potentially encouraging producers, especially larger operations with tight post-harvest cash flow, to increase coverage levels. After four consecutive years of waivers, stakeholders increasingly view the relief as standard practice.

“Interest deferrals have become a lifeline for many producers, but their growing frequency could weaken payment discipline and constrain FCIC’s ability to withhold deferrals in future fiscal or disaster conditions,” said Dr. Francis Tsiboe, co-author and research economist at ARPC. He adds: “Balancing immediate relief with long-term program integrity will be key.”

The study flags policy options to better align relief with fiscal discipline, including targeted regional application, modest premium surcharges to pre-fund waivers, and limiting the frequency of use per producer.

The full white paper is available at: https://doi.org/10.22004/ag.econ.364685

Media Contacts:
Dr. Francis Tsiboe – francis.tsiboe@ndsu.edu
Dr. Sandro Steinbach – sandro.steinbach@ndsu.edu
Agricultural Risk Policy Center (ARPC)
North Dakota State University