Crop Insurance
Established in 1862, the Department of Agriculture serves all Americans through anti-hunger efforts, stewardship of nearly 200 million acres of national forest and rangelands, and through product safety and conservation efforts. The USDA opens markets for American farmers and ranchers and provides food for needy people around the world.
Program Accomplishments
For crop year 2006, the estimates are approximately 262.6 million acres for total insurance protection of an estimated $49.9 billion, and for crop year 2007, the estimates are 264.3 million acres for total insurance protection of an estimated $68.9 billion. For crop year 2008, the estimates are approximately 262.6 million acres for total insurance protection of an estimated $66.9 billion.
Uses and Use Restrictions
The Federal Crop Insurance Corporation (FCIC) is a wholly owned government corporation created February 16, 1938 (7 U.S.C.
1501.) Public Law 96-365, dated September 26, 1980, amended the program to provide for nationwide expansion of a comprehensive crop insurance plan.
The Federal Agriculture Improvement and Reform Act of 1996 (P.L.104-127) required the Secretary of Agriculture to establish an independent office for supervision of the FCIC.
The Risk Management Agency (RMA) administers the FCIC and promotes the national welfare by serving America's agricultural producers through effective, market-based risk management solutions and promoting, supporting and regulating sound risk management solutions to preserve and strengthen the economic stability of America's agricultural producers.
RMA fully subsidizes catastrophic crop insurance protection (CAT) except for minor administrative fees paid by the producer.
CAT coverage compensates the producer for yield losses exceeding 50 percent of yield and at a price equal to 55 percent of maximum price (or equivalent amounts for dollar-based programs).
RMA offers additional protection at higher levels of coverage and variable levels of premium subsidy.
The Farm Service Agency (FSA) administers the Noninsured Assistance Program (NAP).
NAP is available to provide coverage for food or fiber crops equivalent to the catastrophic crop insurance protection in areas where catastrophic crop insurance protection is not available.
FCIC offered insurance on the following crops or commodities for the 2007 crop year, with some available only in limited areas: Adjusted Gross Revenue, Adjusted Gross Revenue-Lite, Almonds, Apples, Apricots, Avocado Trees (Florida), Avocados (Revenue, Actual Production History (APH)), Banana Trees, Bananas, Barley (APH, Income Protection (IP), Revenue Assurance (RA)), Blueberries, Cabbage, Canola (APH, RA), Cherry (Dollar), Chile Peppers, Citrus, Citrus Tree (Texas), Clams, Coffee, Coffee Trees, Corn (APH, Crop Revenue Coverage (CRC), Group Risk Income Protection (GRIP), Group Risk Protection (GRP), IP, Indexed Income Protection (IIP), RA), Cotton (APH, CRC, GRIP, GRP, IP, RA), Cranberries, Cultivated Wild Rice, Dry Beans, Dry Peas, Extra Long Staple Cotton, Figs, Flax, Florida Fruit Tree, Forage, Forage (APH, GRP), Forage Seed (Alfalfa), Forage Seeding, Fresh Market Sweet Corn, Fresh Market Tomatoes (APH, Dollar), Grain Sorghum (APH, CRC, GRIP, GRP, IP), Grapefruit, Grapes, Green Beans for Canning, Green Peas, Hybrid Corn Seed, Hybrid Grain Sorghum Seed, Lemons, Limes, Livestock, Macadamia Nuts, Macadamia Trees, Mandarins, Mango Trees (Florida), Millet, Mint, Murcotts, Mustard, Naval Oranges (Citrus Dollar, APH), Nectarines, Nursery, Oats, Onions, Oranges, Papaya, Papaya Trees, Pasture, Peaches , Peaches, Peanuts (APH, GRP), Pears, Pecan Revenue, Peppers, Plums, Popcorn, Potatoes, Prunes, Raisins, Rangeland, Rangeland (GRP), Rice (APH, CRC, RA), Rye, Safflower, Silage Sorghum, Soybeans (APH, CRC, GRIP, GRP, IP, IIP, RA), Stonefruit, Strawberries, Sugar Beets, Sugarcane, Sunflowers (APH, RA), Sweet Corn for Canning, Sweetpotatoes, Table Grapes, Tangelos, Tangerines, Tobacco, Tomatoes (Canning and Processing), Walnuts, and Wheat (APH, CRC, GRIP, GRP, IP, RA).to more affordable risk management tools and improved protection from production and income loss, and to improve the efficiency and integrity of the Federal crop insurance program.
Due to the new legislation, RMA has improved basic products by implementing higher premium subsidies to made buy- up coverage more affordable for producers; made adjustments in actual production history guarantees; and revised the administrative fees for CAT coverage.
Other major provisions of ARPA include: expanded authority of general pilot programs; expansion of the Dairy Options Pilot Program and Risk Management Education; tightening of program compliance and integrity; establishment of expert reviewpanels and procedures for reviewing policies, plans of insurance, and related material or modifications; mandating availability and acceptance of electronic information; and strengthening of "good farming practices" by including scientifically sound sustainable and organic farming practices.
RMA has implemented a cost-share program to producers in eleven historically underserved states in the Northeast to purchase AGR insurance.
Under this program, RMA will pay 50 percent of the producer-paid premium and the entire administrative fee.
RMA anticipates more crops and/or commodities will become insurable through pilot programs approved by the FCIC Board of Directors.
Eligibility Requirements
Applicant Eligibility
Unless otherwise restricted by the insurance policy, owners or operators of farmland, who have an insurable interest in a crop in a county where insurance is offered on that crop are eligible for insurance.
Producers will be covered under the Noninsured Assistance Program (NAP) which is available to provide coverage similar to the catastrophic risk protection in areas where catastrophic risk protection is not available, if such crop is produced for food or fiber and the area is authorized.
Beneficiary Eligibility
Any insured producer who has a financial loss caused from a covered peril for the particular crop insured or covered by the Noninsured Assistance Program (NAP).
Credentials/Documentation
None. This program is excluded from coverage under OMB Circular No. A-87.
Aplication and Award Process
Preapplication Coordination
None.
This program is excluded from coverage under OMB Circular No.
A-102 and E.O.
12372.
Application Procedures
Application for crop insurance offered by a company reinsured by FCIC must be filed with a crop insurance sales agent. Both catastrophic and additional coverage are available only from private companies. In general, crops and acreage must be reported to establish insurance coverage for crop insurance and, if not eligible for crop insurance, such must be filed to establish eligibility for NAP. This program is excluded from coverage under OMB Circular No. A-110.
Award Procedures
The insurance contract becomes effective upon issuance of a Notice of Acceptance by the insurance company. Notices of Acceptance for insurance coverage are issued upon a determination that the applicant is eligible.
Deadlines
Applications must be filed by the appropriate sales closing date for the crop involved.
Authorization
Federal Crop Insurance Act, as amended, 7 U.S.C. 1501-1520, Agricultural Adjustment Act of 1938, Title V, 52 Stat. 31; Federal Crop Insurance Act of 1980, as amended, Public Law 101-624; Federal Crop Insurance Reform Act of 1994, Public Law 103-354; Federal Agriculture Improvement and Reform Act of 1996, Public Law 104-127; Agricultural Research, Extension, and Education Reform Act of 1998, Public Law 105-185; Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act of 1999, Public Law 105- 277; Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriation Act of 2000, Public Law 106-78; Agriculture Risk Protection Act of 2000, Public Law 106-224; Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriation Act of 2001, Public Law 106-387; Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriation Act of 2002, Public Law 107-76.
Range of Approval/Disapproval Time
From 15 to 20 days.
Appeals
Appeals should be addressed within 30 days to the National Appeals Division, U.S. Department of Agriculture, Washington, DC 20250.
Renewals
Continuous insurance contract.
Assistance Considerations
Formula and Matching Requirements
This program has no statutory formula nor matching requirements.
Length and Time Phasing of Assistance
Not applicable.
Post Assistance Requirements
Reports
Private Industry Crop Insurance Acreage Report; Actual Production History Yield Report; and in the event of a loss, Notice of Damage, Production Worksheet, and proof of loss.
Audits
Recipients are subject to audit by the RMA internal compliance function, private insurance company auditors, Office of the Inspector General, USDA, and the General Accounting Office.
Records
Insured must keep for 3 years, after the end of the crop year, records of harvesting, shipments, sale or other disposition of all insured crops produced on each unit covered by the contract and separate records for any uninsured acreage of the insured crops.
Financial Information
Account Identification
12-4085-0-3-351.
Obigations
(Total indemnities): Indemnities: FY 07 $5,266,271,000; FY 08 est $6,569,971,000; and FY 09 est not reported. (Premium subsidy to farmers through reinsured companies): FY 07 est $2,803,070,000; FY 08 est $3,663,065,000; and FY 09 est not reported.
Range and Average of Financial Assistance
Level of assistance varies according to policy, crop and indemnities paid.
Regulations, Guidelines, and Literature
7 CFR Part 400 and a brochure "Introduction to Risk Management"- available at no charge.
Information Contacts
Regional or Local Office
Interested producers should contact their Regional Office listed in Appendix IV of the Catalog, or a private industry crop insurance agent.
Headquarters Office
Department of Agriculture, Administrator, Risk Management Agency, Ag Box 0801, Washington, DC 20250. Telephone: (202) 690-2803.
Criteria for Selecting Proposals
Not applicable.
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