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.
To
promote the national welfare by improving the economic stability
of agriculture through a sound system of crop insurance and providing
the means for the research and experience helpful in devising and
establishing such insurance.
TYPES
OF ASSISTANCE:
Insurance. Place Cursor Here for Definition
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.) The program
was amended by Public Law 96-365, dated September 26, 1980, 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. FCIC is administered by the
Risk Management Agency (RMA), and promotes the national welfare
by improving the economic stability of agriculture through a secure
system of crop insurance. In recent years, RMA has seen dramatic
changes in the network of Federal programs designed to give producers
a meaningful "safety net" against adversity. The President enacted
emergency supplemental appropriations during fiscal years 1999 and
2000 due to the precipitous drop in farm income and the plunge of
commodity prices in 1998. These supplementals included funding for
a reduction of approximately 30 percent in the farmers share of
premium costs. Catastrophic crop insurance protection (CAT) is fully
subsidized except for administrative fees paid by the producer.
This 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). Additional
protection is offered at higher levels of coverage and variable
levels of premium subsidy. The Noninsured Assistance Program (NAP),
which is administered by the Farm Service Agency, is available to
provide coverage equivalent to the catastrophic crop insurance protection
in areas where catastrophic crop insurance protection is not available
and if such crop is produced for food or fiber. The FCIC currently
has 32 pilot programs underway that implement legislation or test
new and innovative crop insurance concepts. Crop insurance pilot
programs which are available include programs for: adjusted gross
revenue, apple quality option, avocado actual production history,
avocado revenue, avocado/mango trees, blueberries, cabbage, cherries,
citrus (dollar),coverage enhancement option, crambe, cultivated
clams, cultivated wild rice, dairy options, Florida fruit trees,
forage seed, fresh market beans, the Income Protection (IP) plan
of insurance, IP barley, malting barley price option, millet, mint,
mustard, onion pilot stage removal option, pecan revenue, processing
chile peppers, processing cucumbers, rangeland (GRP), raspberry/blackberry,
strawberry, sweet potatoes, and winter squash (including pumpkins).
Insurance was offered on the following crops and/or commodities
for the 2001 and 2002 crop years, with some available only in limited
areas: almonds, apples, barley (feed and malting), dry beans, beans
(processing), canola, carambola trees, citrus, citrus trees, corn
(grain, silage, and hybrid seed corn), cotton (upland and ELS),
cranberries, figs, flax, forage, forage seeding, grain sorghum (and
hybrid grain sorghum), grapes, table grapes, grapefruit, grapefruit
trees, lemon, lemon trees, lime, lime trees,macadamia nuts, macadamia
trees, mandarins, mango trees, murcott honey oranges, nursery stock,
oats, onions, orange, orange trees, peaches, peanuts, pears, peas
(dry and green), pecans, peppers, plums, popcorn, potatoes, prunes,
raisins, rapeseed, rice, rye, safflower, soybeans, stonefruit, sugar
beets, sugarcane, sunflowers, sweet corn (fresh market and processing),
tangelos, tangerines, tobacco (guaranteed production and quota),
tomatoes (fresh market and processing), walnuts, and wheat. On June
20, 2000, the President signed into law, provisions which invest
$8.2 billion in five years to further improve Federal crop insurance.
The Agricultural Risk Protection Act of 2000 (ARPA) amended the
Federal Crop Insurance Act to strengthen the safety net for agricultural
producers by providing greater access 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 review panels 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.
Pre-application
Coordination: None. This program is excluded
from coverage under OMB Circular No. A-102 and E.O. 12372.
Application
Procedure: Application for multiple peril
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
Procedure: 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.
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.
Obligations:
(Total indemnities): FY 01 $3,278,918,000; FY 02 est $3,023,403,000;
and FY 03 est $2,988,213,000. (Premium subsidy to farmers through
reinsured companies): FY 01 $1,667,269,000; FY 02 est $1,680,257,000;
and FY 03 est $1,662,322,000.
Range
and Average of Financial Assistance: Level of assistance varies according to policy, crop and indemnities
paid.
For crop year 2001, the estimates are approximately 207.6 million
acres for total insurance protection of an estimated $35.8 billion,
and for crop year 2002, the estimates are 209.2 million acres for
total insurance protection of an estimated $34.9 billion. For crop
year 2003, the estimates are approximately 207.9 million acres for
total insurance protection of an estimated $34.3 billion.
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.
