Federal Crop Insurance Corporation
Federal Crop Insurance Corporation

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Federal Crop Insurance Corporation

The Federal Crop Insurance Corporation (FCIC) is a wholly government-owned entity overseen by the Risk Management Agency within the United States [3] Department of Agriculture. FCIC is responsible for the management of the federal crop insurance program, a vital initiative that offers crop insurance protection to U.S. farmers and agricultural entities.

The context for the establishment of this program can be traced back to the 1930s when American farmers faced economic hardship during the Great Depression. Initially, many farmers believed they were somewhat insulated from the effects of the economic downturn because they could provide food for their own sustenance. However, the situation took a turn for the worse as the Dust Bowl drought set in, making it exceedingly challenging for farmers to cultivate crops. This resulted in a shortage of essential food for both their personal consumption and commercial purposes.

In response to the dire circumstances of the Great Depression and to aid the nation’s recovery, President Franklin D. Roosevelt initiated the New Deal. This comprehensive plan encompassed a range of federal programs, with a particular focus on revitalizing the agricultural sector.

Federal Crop Insurance Corporation



Parent Department

 February 16, 1938


  • Risk Management Agency, United States Department of Agriculture


The Federal Crop Insurance Corporation (FCIC) was established to implement a government initiative aimed at providing insurance coverage for farmers’ produce. This meant that farmers could receive compensation for their crops, even if those crops did not thrive in a given year.

On September 26, 1980, the program underwent expansion through Public Law 96-365.

Initially, participation in the FCIC program was voluntary, but the U.S. government subsidized insurance premiums to encourage farmers to participate. However, this changed with the Federal Crop Insurance Reform Act of 1994, which made participation in the program mandatory for farmers seeking eligibility for deficiency payments associated with certain FCIC programs. During this period of mandatory participation, Catastrophic coverage was introduced, providing compensation to farmers for losses exceeding 50 percent of the average yield, paid at 60 percent of the crop’s established price for that year. Mandatory participation was repealed in 1996, except for those farmers who had accepted other benefits; they were still required to obtain crop insurance or risk forfeiting eligibility for disaster-related benefits.

The Federal Agriculture Improvement and Reform Act of 1996 (P.L.104-127) mandated the creation of an independent office responsible for supervising and overseeing FCIC activities. Furthermore, the Agriculture Risk Protection Act of 2000 (ARPA) introduced amendments that allowed FCIC to offer a broader range of insurance-related risk management tools to farmers and agricultural entities.

Financial claims

From 1980 to 2005, the Federal Crop Insurance Corporation (FCIC) documented a total of $43.6 billion in claims, averaging around $1.7 billion in losses annually. The majority of FCIC claims, comprising three-quarters of the total, were attributed to three weather-related disasters: drought, excess moisture, and hail. The remaining claims were distributed among 27 various causes, including crop-damaging factors such as frost and tornadoes.

Biotech coverage expansion

In September 2008, the U.S. Department of Agriculture granted approval for the extension of the Federal Crop Insurance Corporation’s (FCIC) risk management program. This expansion encompassed agricultural producers engaged in the cultivation and harvesting of specific biotech corn hybrid seeds designed to resist harm caused by lepidoptera pests, including moths and their larvae, as well as protection against below-ground corn rootworm damage. Additionally, the biotech corn hybrid seeds had to demonstrate tolerance to certain herbicides. FCIC coverage for these biotech corn hybrid seeds was initiated in 2009.

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