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1 1 (May 28, 1996)

handle is hein.crs/crsaafh0001 and id is 1 raw text is: 96-477 ENR May 28, 1996 Crop Insurance and Risk Management: Provisions in the Enacted 1996 Farm Bill Ralph M. Chite Specialist in Agricultural Policy Environment and Natural Resources Policy Division Summary Provisions in the Federal Agriculture Improvement and Reform Act of 1996 (P.L. 104-127, the 1996 farm bill) make several changes to the federal crop insurance program administered by the U.S. Department of Agriculture (USDA). Under the new farm law, a producer no longer is required to acquire the minimum level of crop insurance coverage, as long as the producer waives, in writing, any eligibility for future disaster payments. It also allows USDA to continue to offer the basic level of insurance coverage in states or regions that have an insufficient number of approved private insurance providers, but requires USDA to shift policies to private companies when private coverage is adequate. The new law also creates a new Office of Risk Management with jurisdiction over the crop insurance program, and makes seed crops and aquaculture eligible for payments under the noninsured assistance program. Other provisions institute separate pilot programs for insect infestation, nursery crop insurance coverage, futures and options trading, and revenue insurance. The permanently authorized livestock assistance programs, which assist livestock producers when they lose a significant portion of their on-farm feed to a natural disaster, are terminated. Federal Crop Insurance Background. The federal crop insurance program, which is administered by USDA's Federal Crop Insurance Corporation (FCIC), is designed to protect crop producers from unavoidable risks associated with adverse weather, plant diseases, and insect infestations. A producer who chooses to purchase an insurance policy must do so by an administratively determined deadline date, which varies by crop and usually coincides with the planting season. Most policies are sold and completely serviced through approved private insurance companies that are reinsured by FCIC. FCIC absorbs a large percentage of the program losses, compensates the reinsured companies for a portion of their operating and administrative expenses, and also subsidizes the premium paid by participating producers. Congressional Research Service o.o The Library of Congress CRS Report for Congress Received through the CRS Web

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