Crop insurance is purchased by agricultural producers, and subsidized by the federal government, to protect against either the loss of their crops due to natural disasters, such as hail, drought, and floods, or the loss of revenue due to declines in the prices of agricultural commodities. The two general categories of crop insurance are called crop-yield insurance and crop-revenue insurance. On average, the federal government subsidizes 62 percent of the premium. In 2014, crop insurance policies covered 294 million acres. Major crops are insurable in most counties where they are grown, and approximately 83% of U.S. crop acreage is insured under the federal crop insurance program. Four crops—corn, cotton, soybeans, and wheat— typically account for more than 70% of total enrolled acres. For these major crops, a large share of plantings is covered by crop insurance. In 2014, the portion of total corn acreage covered by federal crop insurance was 87%; cotton, 96%; soybeans, 88%; and wheat, 84%.
The Federal Agriculture Improvement and Reform Act of 1996, known informally as the Freedom to Farm Act, the FAIR Act, or the 1996 U.S. Farm Bill, was the omnibus 1996 farm bill that, among other provisions, revises and simplifies direct payment programs for crops and eliminates milk price supports through direct government purchases.
The Food, Conservation, and Energy Act of 2008 was a $288 billion, five-year agricultural policy bill that was passed into law by the United States Congress on June 18, 2008. The bill was a continuation of the 2002 Farm Bill. It continues the United States' long history of agricultural subsidies as well as pursuing areas such as energy, conservation, nutrition, and rural development. Some specific initiatives in the bill include increases in Food Stamp benefits, increased support for the production of cellulosic ethanol, and money for the research of pests, diseases and other agricultural problems.
In United States federal agriculture legislation, the Agricultural Management Assistance Program was authorized in the Agricultural Risk Protection Act of 2000 and permanently authorized and amended in the 2002 farm bill to provide mandatory funding of $20 million annually from FY2003 through FY 2007 and $10 million in all other years. Participants in 15 designated states, primarily in the northeast, that had been under-served by crop insurance are to receive financial assistance, not to exceed $50,000 per year, to help pay to install conservation practices and take other specified actions that will reduce their financial risk.
The Agriculture Risk Protection Act of 2000 made major revisions to the United States' federal crop insurance program and provided emergency agricultural assistance. The crop insurance provisions significantly increased the program's government subsidy; improved coverage for farmers affected by multiple years of natural disasters; and authorized pilot insurance programs for livestock farmers and growers of other farm commodities that were not served by crop insurance, among many other provisions. The emergency provisions made available a total of $7.14 billion in emergency farm assistance, mostly in direct payments to growers of various commodities to compensate for low farm commodity prices.
The Bioenergy Program was an initiative of the United States Department of Agriculture Farm Service Agency. The program started on October 1, 2002, and was terminated on June 30, 2006.
Dairy Market Loss Assistance (DMLA) was a series of programs of the United States Department of Agriculture to make emergency direct-payment programs for dairy farmers, in response to volatile farm milk prices. It was funded over three consecutive years (FY1999-2001) by three separate emergency supplemental appropriations measures. The primary purpose of these payments was to supplement dairy farmer income. Dairy farmers received supplemental payments of $200 million provided by the Omnibus Consolidated and Emergency Appropriations Act, 1999 in DMLA-I; $125 million from the FY2000 agriculture appropriations act in DMLA-II; and $675 million in emergency provisions in the FY2001 agriculture appropriations act in DMLA-III.
In the United States, the Dairy Price Support Program is the federal government program that maintains a minimum farm price for milk used in the manufacture of dairy products. It is one of many agricultural support programs. Under the dairy program, the United States Department of Agriculture (USDA) indirectly assures a minimum price for milk by purchasing any cheddar cheese, nonfat dry milk, and butter offered to it by dairy processors at stated prices. These purchase prices are set high enough to enable dairy processors to pay farmers at least the support price for the milk they use in manufacturing these products.
In the United States, deficiency payments are direct government payments made to farmers who participated in annual commodity programs for wheat, feed grains, rice, or cotton, prior to 1996.
The Wildlife Habitat Incentives Program is a program established by the Federal Agriculture Improvement and Reform Act of 1996 to promote voluntary implementation of on-farm management practices to develop habitat for wetland and upland wildlife, threatened and endangered species, fish, and other types of wildlife using cost-share payments and technical assistance. Between its inception and the start of the 2002 financial year, the program enrollment included 10,729 long term agreements on over 1,600,000 acres (6,500 km2). The Farm Security and Rural Investment Act of 2002 reauthorized the program through the 2007 financial year with mandatory annual funding from the Commodity Credit Corporation (CCC), growing from $15 million in 2002 to $85 million in 2005 through 2007. It also created a pilot program using up to 15% of the funding to provide additional payments to land owners who agree to enroll land for.at least 15 years.
Technical Assistance for Specialty Crops (TASC) provides funding for projects that address sanitary and other technical barriers to the export of specialty crops from the US. It was introduced with the 2002 farm bill, giving an annual budget of $2 million in Commodity Credit Corporation (CCC) resources. "Specialty crops" for this purpose are defined as all except a small list of cereals and other major crops. CCC resources are to be for public and private projects and for technical assistance.
Onion market loss assistance refers to market loss assistance provided by the United States Federal Government to onion producers in Orange County, New York, that suffered losses to onion crops during one or more of the 1996 through 2000 drop years. The 2002 farm bill provided $10 million of Commodity Credit Corporation (CCC) funds for this purpose.
The United States Omnibus Consolidated and Emergency Appropriations Act, FY1999 Pub.L. 105–277, among its numerous provisions that include the regular annual appropriations for most United States Department of Agriculture (USDA) programs, provided $5.9 billion in emergency spending for USDA programs to shore up farm income and to compensate farmers for natural disasters. More than one-half of this amount was in the form of direct market loss payments to grain, cotton, and dairy farmers for income assistance. Most of the balance was for disaster payments made to farmers who experienced large crop losses in either 1998 or in 3 of the 5 years between 1994 through 1998.
In United States agricultural law, producers who grow a crop that is not eligible for crop insurance may be eligible for a direct payment under the Farm Service Agency’s Noninsured Crop Disaster Assistance Program (NAP). NAP has permanent authority under the Federal Crop Insurance Reform Act of 1994,.
Milk Income Loss Contract (MILC) Payments is the name given by USDA to the dairy farmer counter-cyclical payments program, authorized by the 2002 farm bill. Under the program, dairy farmers nationwide are eligible for a federal payment whenever the minimum monthly market price for farm milk used for fluid consumption in Boston falls below $16.94/cwt. A producer potentially can receive a payment equal to 45 percent of the difference between the $16.94 per cwt. target price and the market price, in any month that the Boston market price falls below $16.94. A producer can receive a payment on all milk production during that month, but no payments will be made on any annual production in excess of 2.4 million pounds per dairy operation. On average this limit is reached by a milking herd of 130 cows. MILC payments apply to production beginning December 1, 2002 through September 30, 2012.
Market loss payments is a designation first used in the Omnibus Consolidated and Emergency Appropriations Act, FY1999 to describe the $3.1 billion in emergency income support payments authorized for eligible grain, cotton, and dairy farmers. The Act stated that such funds were to compensate farmers for the loss of 1998 income caused by “regional economic dislocation, unilateral trade sanctions, and the failure of the government to pursue trade opportunities aggressively.” Similar economic emergency support payments for selected commodities were subsequently enacted in P.L. 106-78, in P.L. 106-224, in P.L. 106-387, and in P.L. 107-25. Market loss assistance to grain and cotton producers were distributed in parallel manner to the contract payments authorized by the Agricultural Market Transition Act.
The incentive payments are direct payments made under the National Wool Act to producers of wool and mohair, which were similar to deficiency payments made to producers of grains and cotton. The incentive payment rate was the percentage needed to bring the national average return to producers up to the annually set national support price. Each producer’s direct payment was the payment rate times the market receipts. Producers with higher market receipts got larger support payments. This created an incentive to increase output and to improve quality.
Honey program — In the United States, non-recourse marketing loans had long been available to support honey prices until FY1994, when the funding was suspended by provisions in annual appropriations legislation. The 1990 farm bill had set honey loan rates at $0.538 per pound and permitted deficiency payments. The 1996 farm bill repealed the statutory authority for the honey program. A Honey Recourse Loan Program was made available for the 1998 crop only through broader emergency spending authority in the FY1999 agriculture appropriations act. The 2002 farm bill made honey eligible for marketing assistance loans from 2002 through 2007.
Flex acreage — The Omnibus Budget Reconciliation Act of 1990 mandated that deficiency payments not be made on 15% of a farm’s crop acreage base, called normal flex acres. The acreage could be planted to any program crop, but not fruits and vegetables. An additional 10% of the farm’s base acreage could be flexed at the option of the operator. Flexing did not diminish the crop acreage base of a farm. The 1996 farm bill effectively provided total flexibility among all commodities, except for fruits and vegetables, and this policy was continued by the 2002 farm bill.
