What Does Federal Crop Insurance Mean?
Federal crop insurance is a program that provides insurance policies for agricultural producers in the United States. The Risk Management Agency (RMA), a government unit, oversees its implementation by working with the private insurance companies that provide the insurance policies.
Insuranceopedia Explains Federal Crop Insurance
Crop insurance was first introduced in 1938 to address the devastating effects the Great Depression had on American farmers. It went through several revisions until its current iteration, which enlists private insurance companies to provide the policies under the watch of the Risk Management Agency. One of the RMA’s regulations is that an insurance product must be sold at the same price by all insurance companies participating in the program.
The government subsidizes a lot of the policies, including the administrative costs of the insurance companies. The most popular product among farmers is the Multiple Peril Crop Insurance, which has a partially subsidized premium.
Aside from providing insurance money for agricultural land that has suffered financial losses due to perils, the program also offers educational services for matters related to risk prevention in farming.