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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 2019, crop insurance policies covered almost 380 million acres. Major crops are insurable in most counties where they are grown, and approximately 90% 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.
The National Agricultural Statistics Service (NASS) is the statistical branch of the U.S. Department of Agriculture and a principal agency of the U.S. Federal Statistical System. NASS has 12 regional offices throughout the United States and Puerto Rico and a headquarters unit in Washington, D.C. NASS conducts hundreds of surveys and issues nearly 500 national reports each year on issues including agricultural production, economics, demographics and the environment. NASS also conducts the United States Census of Agriculture every five years.
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.
In the United States, the farm bill is the primary agricultural and food policy tool of the federal government. Every five years, Congress deals with the renewal and revision of the comprehensive omnibus bill.
In the United States, the Acreage Reduction Program (ARP) is a no-longer-authorized annual cropland retirement program for wheat, feed grains, cotton, or rice in which farmers participating in the commodity programs were mandated to idle a crop-specific, nationally set portion of their base acreage during years of surplus. The idled acreage was devoted to a conserving use. The goal was to reduce supplies, thereby raising market prices. Additionally, idled acres did not earn deficiency payments, thus reducing commodity program costs. ARP was criticized for diminishing the U.S. competitive position in export markets. The 1996 farm bill did not reauthorize ARPs. ARP differed from a set-aside program in that under a set-aside program reductions were based upon current year plantings, and did not require farmers to reduce their plantings of a specific crop.
The Agricultural Act of 1956 created the Soil Bank Program, addressed the disposal of Commodity Credit Corporation (CCC) inventories of surplus stocks, contained commodity support program provisions, and contained forestry provisions. The Soil Bank Act authorized short- and long-term removal of land from production with annual rental payments to participants. The Acreage Reserve Program, for wheat, corn, rice, cotton, peanuts, and several types of tobacco, allowed producers to retire land on an annual basis in crop years 1956 through 1959 in return for payments. The Conservation Reserve Program allowed producers to retire cropland under contracts of 3, 5, or 10 years in return for annual payments. The Soil Bank Act was repealed by Section 601 of the Food and Agriculture Act of 1965. The Conservation Reserve portion of the Soil Bank was a model for the subsequent Conservation Reserve Program (CRP), enacted in 1985.
In United States agricultural law, a farm’s base acreage is its crop-specific acreage of wheat, corn, grain sorghum, barley, oats, upland cotton, soybeans, canola, flax, mustard, rapeseed, safflower, sunflowers, and rice eligible to enroll in the Direct and Counter-cyclical Program (DCP) under the 2002 farm bill. A farmer’s crop acreage base is reduced by the portion of cropland placed in the Conservation Reserve Program (CRP), but increased by CRP base acreage leaving the CRP. Farmers have the choice of base acreage used to calculate Production Flexibility Contract payments for crop year 2002, or the average of acres planted for crop years 1998 through 2001.
The Food, Agriculture, Conservation, and Trade (FACT) Act of 1990 — P.L. 101-624 was a 5-year omnibus farm bill that passed Congress and was signed into law.
Crop acreage base is a crop-specific measure equal to the average number of acres planted to a particular program crop for a specified number of years. The crop-specific nature of this measurement was important prior to the 1996 farm bill, which adopted an inclusive measure of base acreage and allowed planting flexibility among the program crops. The sum of the crop acreage bases for all program crops on a farm could not exceed the farm acreage. The acreage base was used in determining the number of acres a farmer, under an acreage reduction program, had to remove from normal crop production and devote to conserving uses in order to be eligible for USDA price and income supports.
In United States agricultural policy, the triple base plan, also called the flexible base plan, is a proposal under which farmers who raise program crops would receive program payments only on a certain percentage of their permitted acreage. A producer participating in a federal price support program actually would have three categories of base acres for program purposes:
The Food Security Act of 1985, a 5-year omnibus farm bill, allowed lower commodity price and income supports and established a dairy herd buyout program. This 1985 farm bill made changes in a variety of other USDA programs. Several enduring conservation programs were created, including sodbuster, swampbuster, and the Conservation Reserve Program.
In the United States, under some previous commodity support laws, crop acreage bases were, in general, calculated as a 5-year average of planted and considered planted acreage. Acreage considered planted included acreage idled under production adjustment programs or idled for weather-related reasons or natural disasters; acreage devoted to conservation purposes or planted to certain other allowed commodities; and acreage USDA determined was necessary for fair and equitable treatment.
The Direct and Counter-cyclical Payment Program (DCP) of the USDA provides payments to eligible producers on farms enrolled for the 2002 through 2007 crop years. There are two types of DCP payments – direct payments and counter-cyclical payments. Both are computed using the base acres and payment yields established for the farm. DCP was authorized by the 2002 Farm Bill and is administered by the Farm Service Agency (FSA).
In United States agricultural policy, permitted acreage refers to the acreage on which a farm program participant was permitted to grow a program crop after satisfying acreage reduction requirements. For example, when a 10% acreage reduction program was in effect for wheat, a farmer with a 100-acre (0.40 km2) wheat base could grow wheat on 90 acres (360,000 m2), the permitted acres. Limits on production were eliminated under the 2002 farm bill through crop year 2007, as also was done under the 1996 farm bill.
Optional flex acreage is a term in United States agricultural policy.
In United States agricultural law, Normal flex acreage was a provision of the Omnibus Budget Reconciliation Act of 1990 requiring a mandatory 15% reduction in payment acreage. Under this provision, producers were ineligible to receive deficiency payments on 15% of their crop acreage base. Producers, however, were allowed to plant any crop on this acreage, except fruits, vegetables, and other prohibited crops. Flex acreage was eliminated by the 1996 farm bill.
In United States agricultural law, normal crop acreage refers to the acreage on a farm normally devoted to a group of designated crops. When a set-aside program was in effect, a participating farm’s total planted acreage of such designated crops plus set-aside acreage could not exceed the normal crop acreage. The authority for set-asides was eliminated by the 1996 farm bill.
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.
In United States agricultural policy, Farm acreage base referred to the total of the crop acreage bases for a farm for a year, the average acreage planted to soybeans and other non-program crops, and the average acreage devoted to conserving uses The 1996 farm bill and the 2002 farm bill eliminate the need to calculate a farm acreage base.
Wheat is produced in almost every state in the United States, and is the principal cereal grain grown in the country. The type and quantity vary between regions. The US is ranked third in production volume of wheat, with almost 58 million tons produced in the 2012–2013 growing season, behind only China and India. The US is ranked first in crop export volume; almost 50% of its total wheat production is exported.
References
This article incorporates public domain material from the Congressional Research Service document: Jasper Womach. "Report for Congress: Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition" (PDF).
