Risk Management Agency RMA

The Federal Crop Insurance Act, signed on February 16, 1938, as part of a New Deal farm law, created the Federal Crop Insurance Corporation, a government corporation that first insured wheat. For decades few farmers enrolled, and Congress relied instead on ad hoc disaster payments. Laws in 1980, 1994, and 2000 expanded coverage and raised premium subsidies, and the Risk Management Agency was created in 1996 to administer the corporation's programs.

Crop insurance is a public-private partnership. Private insurance companies sell and service policies, while RMA sets the rules and premium rates, pays a large share of each farmer's premium, reimburses companies for administrative costs, and reinsures their losses. Policies cover hundreds of millions of acres of crops against falling yields or revenue, and farmers must meet basic conservation requirements to receive the premium subsidy.

Crop insurance has become the largest part of the farm safety net, costing taxpayers billions of dollars a year. Supporters across both parties say it is a market-based tool that farmers help pay for and that lenders rely on, and the 2025 budget reconciliation law expanded subsidies. Critics, including some fiscal conservatives and environmental groups, argue that there are no payment limits, so the largest operations receive the biggest subsidies, and that insurance encourages farming on marginal land.