Federal Crop Insurance
What Does Federal Crop Insurance Mean?
Federal crop insurance is a program that offers insurance policies to agricultural producers in the United States. The Risk Management Agency (RMA), a government agency, oversees its implementation by collaborating with private insurance companies that provide these policies.
Insuranceopedia Explains Federal Crop Insurance
Crop insurance was first introduced in 1938 to address the severe impact of the Great Depression on American farmers. Over time, it underwent several revisions, evolving into its current form, where private insurance companies provide policies under the oversight of the Risk Management Agency (RMA). According to RMA regulations, an insurance product must be sold at the same price by all participating insurance companies in the program.
The government subsidizes many of these policies, including the administrative costs for insurance companies. The most popular product among farmers is Multiple Peril Crop Insurance, which has a partially subsidized premium.
In addition to offering insurance coverage for agricultural land that incurs financial losses due to perils, the program also provides educational services related to risk prevention in farming.
