In 2023, the Federal Crop Insurance Program (FCIP) provided coverage for an impressive 539 million acres and 42 million head of cattle and swine, according to the Risk Management Agency (RMA). This extensive coverage underscores the critical role of crop insurance in safeguarding farmers against financial losses due to natural disasters, decreased production, and low commodity prices. As the backbone of agricultural risk management, the FCIP continues to evolve, with new legislative proposals aiming to enhance its effectiveness.
The FCIP, administered by the RMA, a division of the USDA, was established by the Agricultural Adjustment Act of 1938 and permanently authorized through the Federal Crop Insurance Act of 1980. The program aims to promote economic stability in agriculture by providing a robust system of crop insurance. The FCIP receives funding through Title Eleven of the Farm Bill, which is currently under review for updates by both the United States Senate and House of Representatives.
Senator Stabenow of Michigan has introduced the Rural Prosperity and Food Security Act, a comprehensive Farm Bill proposal that seeks to amend several crop insurance provisions. Among the key changes, the bill proposes to increase the premium subsidy for the Supplemental Coverage Option (SCO) policies from 65% to 80% and expand the availability of these policies to more crops. The coverage level for SCO policies would also see an increase from 86% to 90%. Additionally, the bill aims to extend the premium subsidy eligibility period for beginning farmers and ranchers from five to ten years. It also focuses on enhancing access to crop insurance for specialty crops and diversified farms by promoting research and development of new insurance policies and offering discounts for sustainable farming practices such as cover crops, precision irrigation, and crop rotations.
On the other side of the aisle, Senator John Hoeven of North Dakota has introduced the Federal Agriculture Risk Management Enhancement and Resilience Act of 2024 (FARMER Act). This bill echoes some of the Senate’s proposals, such as increasing the premium subsidy for SCO policies from 65% to 80%. It also aims to make higher levels of coverage more affordable by raising the premium subsidy at the 80% and 85% coverage levels to 77% and 68%, respectively. Senator Hoeven has urged the Senate to incorporate this bill into its version of the Farm Bill to fortify crop insurance and provide greater financial security for producers.
Meanwhile, in the House of Representatives, Chairman GT Thompson of Pennsylvania has put forward the Farm, Food, and National Security Act of 2024. This bill aligns with several of the Senate’s proposals, including extending the premium subsidy eligibility for beginning farmers and ranchers to ten years and increasing the SCO policy premium subsidy to 80%. Additionally, it directs the RMA to develop new insurance policies for various commodities, including sugar beets, mushrooms, winter oilseeds, poultry, and wine grapes. The House Agriculture Committee has already held a markup meeting, debated, and voted on amendments to this bill, which will now proceed to the full House for consideration.
The proposed changes to the FCIP reflect a concerted effort by lawmakers to enhance the resilience and sustainability of American agriculture. By increasing subsidies and expanding coverage options, these legislative initiatives aim to provide farmers with more robust tools to manage risks and ensure economic stability. As the Farm Bill process unfolds over the coming months, stakeholders in the agricultural sector will be closely watching the developments to see how these changes will impact their operations and livelihoods.