Congress created and provides funding for the modern-day crop insurance system through the Federal Crop Insurance Corporation (FCIC) as a way to help farmers manage the risks of natural disasters and market fluctuations. The activities of FCIC are carried out by the Risk Management Agency (RMA) of USDA. Lawmakers intended for the system to shelter taxpayers from the full costs of agricultural disasters.
To this end, FCIC/RMA sets program standards and procedures, develops and approves new products and improvements to existing products and programs, sets premium rates and price elections, and provides general program oversight. The Federal government makes crop insurance affordable for farmers by discounting farmer premiums, and offsetting a portion of the delivery costs that would otherwise be built into the premium.
* Updated April 2020