Federal Crop Insurance

Congress created the Federal Crop Insurance Corporation in 1938, but the program grew slowly until laws in 1980, 1994, and 2000 expanded subsidies to draw more farmers in. Today private insurance companies sell and service the policies, while the Agriculture Department's Risk Management Agency sets rules and rates and the government pays a large share of farmers' premiums, about 60 percent on average, and reimburses companies' costs and shares their losses.

Policies cover losses from drought, floods, hail, disease, and, for revenue policies, falling prices. More than 130 crops are insurable, and policies cover more than 500 million acres, including most corn, soybean, wheat, and cotton acres. The program costs taxpayers roughly 10 billion dollars or more a year, more in bad years. The 2025 budget law raised premium subsidies, especially for beginning farmers, and expanded supplemental coverage.

Supporters say crop insurance is the most important safety net for farmers, who share in the cost, and that it reduces the need for ad hoc disaster bailouts. Critics, from environmental groups to fiscal conservatives, say premium subsidies have no income limit or payment cap, so the largest farms get the most, and that insurance encourages planting on marginal land. Congress has continued to pass separate disaster and trade aid on top of it, including about 12 billion dollars in bridge payments announced in December 2025 after tariffs hurt crop exports.