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Crop Insurance

Published on AidPage by IDILOGIC on Jun 24, 2005

Administered by:

US Federal Government Agency (see all agencies)
Department of Agriculture , Risk Management Agency
CFDA #: 10.450

Possible 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, stone fruit, 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