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 The United States Department of Agriculture (USDA) is the federal executive department responsible for developing and executing federal laws related to farming, forestry, rural economic development, and food. It aims to meet the needs of comme ...

. FCIC manages the federal crop insurance program, which provides U.S. farmers and agricultural entities with crop insurance protection. Corn corps bordering the Wabash River

Background

During the 1930s, farmers thought they were safe during the

Great Depression The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...

because they could provide food for themselves. That changed quickly when the

Dust Bowl The Dust Bowl was a period of severe dust storms that greatly damaged the ecology and agriculture of the American and Canadian prairies during the 1930s. The phenomenon was caused by a combination of both natural factors (severe drought) a ...

drought made it difficult for farmers to produce any crops during this time. By not being able to produce these essential crops, they lacked necessary food for themselves and were unable to make money off of the crops. In order to help America recover from the Great Depression, President Franklin D. Roosevelt started the

New Deal The New Deal was a series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1939. Major federal programs agencies included the Civilian Con ...

, which was a plan compiled of federal programs, including several focused on farming.

History

The Federal Crop Insurance Corporation was a program created to carry out the government initiative to provide insurance for farmers' produce, which means that farmers would receive compensation for crops, even if they were not sustained in that year. On September 26, 1980, the program was expanded through Public Law 96-365.Crop Insurance (10.450)
Federal Grants Wire. 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 The Federal Crop Insurance Reform and Department of Agriculture Reorganization Act of 1994, , was introduced on April 14, 1994 by Eligio de la Garza ( D- TX) and was signed into law on October 13, 1994 by President William J. Clinton. It consist ...

, which required farmers to participate in the program in order to be eligible for deficiency payments related to certain FCIC programs. During the mandatory participation Catastrophic coverage was created. "Catastrophic coverage compensated farmers for losses exceeding 50 percent of an average yield paid at 60 percent of the price established for the crop for that year." Mandatory participation was repealed in 1996, but for the farmers who had accepted other benefits it was mandatory to obtain crop insurance, or they would surrender the eligibility for any benefits that were caused by disaster. 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 The Agriculture Risk Protection Act of 2000 () made major revisions to the United States' federal crop insurance program and provided emergency agricultural assistance. The crop insurance provisions significantly increased the program's government ...

(ARPA) made amendments, providing for FCIC to offer a wider selection of insurance-related risk management tools to farmers and agricultural entities.

Financial claims

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 were the result of three weather-related disasters –

drought A drought is defined as drier than normal conditions.Douville, H., K. Raghavan, J. Renwick, R.P. Allan, P.A. Arias, M. Barlow, R. Cerezo-Mota, A. Cherchi, T.Y. Gan, J. Gergis, D. Jiang, A. Khan, W. Pokam Mba, D. Rosenfeld, J. Tierney, an ...

, excess moisture, and

hail Hail is a form of solid precipitation. It is distinct from ice pellets (American English "sleet"), though the two are often confused. It consists of balls or irregular lumps of ice, each of which is called a hailstone. Ice pellets generally fal ...

– with the remaining claims divided among 27 different causes, including crop-damaging frost and tornados."Climate Change" by John B. Stephenson, Google Books
/ref>

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 Biotechnology is the integration of natural sciences and engineering sciences in order to achieve the application of organisms, cells, parts thereof and molecular analogues for products and services. The term ''biotechnology'' was first used ...

corn Maize ( ; ''Zea mays'' subsp. ''mays'', from es, maíz after tnq, mahiz), also known as corn (North American and Australian English), is a cereal grain first domesticated by indigenous peoples in southern Mexico about 10,000 years ago. The ...

hybrid seeds that are designed to be resistant to damage from

lepidoptera Lepidoptera ( ) is an order of insects that includes butterflies and moths (both are called lepidopterans). About 180,000 species of the Lepidoptera are described, in 126 families and 46 superfamilies, 10 percent of the total described speci ...

pests (including

moths Moths are a paraphyletic group of insects that includes all members of the order Lepidoptera that are not butterflies, with moths making up the vast majority of the order. There are thought to be approximately 160,000 species of moth, many of w ...

and their larvae) and below-ground

corn rootworm ''Diabrotica'' is a large, widespread genus of beetles in the family Chrysomelidae. Members of this genus include several destructive agricultural pest species, sometimes referred to as cucumber beetles or corn rootworms. Species * '' Diabrotic ...

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."Farmers using biotech seed may pay less insurance," Reuters, August 19, 2008
/ref>

References

External links

Official website

Federal Crop Insurance Corporation
in the

Federal Register The ''Federal Register'' (FR or sometimes Fed. Reg.) is the official journal of the federal government of the United States that contains government agency rules, proposed rules, and public notices. It is published every weekday, except on fede ...

{{authority control Agricultural insurance in the United States United States Department of Agriculture agencies Corporations chartered by the United States Congress Government-owned companies of the United States New Deal agencies Federal Agriculture Improvement and Reform Act of 1996