Federal Crop Insurance Corporation
|Federal Crop Insurance Corporation|
|Formed||February 16, 1938|
|Parent department||Risk Management Agency, United States Department of Agriculture|
The Federal Crop Insurance Corporation (FCIC) is a wholly owned government corporation managed by the Risk Management Agency of the United States Department of Agriculture. FCIC manages the federal crop insurance program, which provides U.S. farmers and agricultural entities with crop insurance protection.
FCIC was created by the United States Congress in legislation that passed on February 16, 1938 (7 U.S.C. § 1501). The legislation was created in response to the economic difficulties brought to the U.S. farming industry by the Great Depression and the weather-related catastrophe of the Dust Bowl. On September 26, 1980, the program was expanded through Public Law 96-365.
Initially, participation in FCIC was voluntary. However, insurance premiums were subsidized by the U.S. government as a means of encouraging participation in the FCIC program. This changed with the Federal Crop Insurance Reform Act of 1994, which required farmers to participate in the program in order to be eligible for deficiency payments related to certain FCIC programs. Mandatory participation was repealed in 1996.
An independent office designed to supervise and monitor FCIC activities was mandated in the Federal Agriculture Improvement and Reform Act of 1996 (P.L.104-127). The Agriculture Risk Protection Act of 2000 (ARPA) made amendments, providing for FCIC to offer a wider selection of insurance-related risk management tools to farmers and agricultural entities.
Between 1980 and 2005, FCIC recorded $43.6 billion in total claims, averaging approximately $1.7 billion in losses per year. Three-quarters of FCIC claims result three weather-related disasters – drought, excess moisture, and hail – with the remaining claims divided among 27 different causes, including crop-damaging frost and tornados.
Biotech coverage expansion
In September 2008, the U.S. Department of Agriculture approved the expansion of the FCIC’s risk management program to include agricultural producers involved in the planting and harvesting of certain biotech corn hybrid seeds that are designed to be resistant to damage from lepidoptera pests (including moths and their larvae) and below-ground corn rootworm damage. The biotech corn hybrid seeds must also show tolerance to certain herbicides. FCIC coverage for the biotech corn hybrid seeds went into effect in 2009.
- “Climate Change” by John B. Stephenson, Google Books
- Crop Insurance (10.450), Federal Grants Wire.
- History of the Crop Insurance Program, U.S. Department of Agriculture].
- "Farmers using biotech seed may pay less insurance," Reuters, August 19, 2008