Farm & Commodity Policy - Title XI: Crop Insurance Program Provisions

The Federal Crop Insurance Program (FCIP) has evolved substantially over time, including: the types of coverage offered, the crops or products for which coverage is available, and the amount of Government support provided to subsidize policy purchases. The program was first authorized under the Federal Crop Insurance Act of 1938. The Act made available crop insurance coverage for wheat and led to the creation of the Federal Crop Insurance Corporation (FCIC) to carry out the FCIP. Subsequent legislation throughout the decades made major reforms to FCIP, including: raising subsidy rates to increase participation, shifting the delivery of crop insurance services from the Federal Government to private companies, introducing catastrophic risk protection coverage, and authorizing area-based insurance products. The Risk Management Agency (RMA) was created in 1996 to administer FCIC’s programs.

The FCIC has the authority to make certain modifications or expansions to existing policies or introduce new policies without the need for rulemaking or new legislation. However, other changes to the program (such as changes in subsidy rates or coverage levels) must be authorized by Congress. Most recently, the 2025 One Big Beautiful Bill Act (OBBBA) included several changes to FCIP. These changes included: expanded support for beginning farmers and ranchers, changes to area-based crop insurance plans such as the Supplemental Coverage Option (SCO), and higher premium support for policies under basic and optional unit structures.

Prior to OBBBA, the 2018 Farm Bill made minimal changes to the crop insurance program. The most significant change was the authorization of crop insurance policies for industrial hemp crops. Both yield and revenue coverage continue under the 2018 Farm Bill, as well as whole-farm coverage and livestock coverage. Both SCO and the Stacked Income Protection Plan (STAX) (established under the 2014 Farm Bill) continued under the 2018 Farm Bill. While enrollment of SCO acres remained under 5 million acres for the first four years it was offered, participation in SCO has since increased, with more than 12 million acres enrolled in 2024. The 2018 Farm Bill also allowed enterprise units to span multiple counties.

Participation in some crop insurance plans has been limited by participation choices in other programs. Prior to OBBBA, producers who elected to enroll base acres in the Agriculture Risk Coverage (ARC) program were not allowed to purchase SCO for the same crop on the same farm. However, OBBBA eliminated this restriction. There are also limitations on STAX enrollment. STAX is available only to upland cotton producers. Producers who enroll seed cotton-base acres (on a given farm under the Price Loss Coverage (PLC) or ARC programs) are not eligible to purchase STAX for any upland cotton acres on that farm.

Benefits under the Federal crop insurance program are not subject to the eligibility and payment limitations that govern Title I crop commodity programs.

Traditional Crop Insurance

Producers can purchase insurance policies at a subsidized rate under FCIP. These insurance policies make indemnity payments to producers based on current losses related to either below-average yields (crop yield insurance) or below-average revenue (revenue insurance).

Policies are sold through private insurance companies called Authorized Insurance Providers (AIPs) under a Standard Reinsurance Agreement (SRA). USDA's Risk Management Agency (RMA) subsidizes the insurance premiums, as well as a portion of the companies' administrative and operating expenses, and shares underwriting gains and losses with the companies. Congress has periodically raised premium subsidy rates for certain types of policies, such that in 2024, on average, producers were responsible for paying only 38 percent of their policy premiums. Crop insurance is available for more than 120 unique agricultural commodities, including coverage for some animals and animal products. However, coverage is not available for all commodities in all areas, and all types of insurance are not available for all commodities. On crop policies, farmers sign up for insurance before planting, but usually pay premiums after harvest.

Several types of crop yield and revenue insurance and livestock insurance plans are available:

Yield Insurance Plans

Yield insurance plans are the oldest and most widely available crop insurance product. Actual Production History (APH) and Yield Protection (YP) policies protect farmers against yield losses due to natural causes such as drought, excessive moisture, hail, wind, frost, insects, and disease. APH and YP products differ only on the basis that YP policies use futures contracts to determine projected prices, while APH policies do not. Yield coverage levels are based on a producer's expected yield, which is calculated from the farm's actual production history (average yields over the last 4 to 10 years). The farmer selects a yield-coverage level, which can range from 50 to 75 percent of average yield (up to 85 percent in some areas), and an indemnity price. The selected price can range from 60 to 100 percent of the crop price, established annually by RMA. If the harvested yield is less than the insured yield (i.e., expected yield times the coverage level), the farmer receives an indemnity based on the difference between the actual yield and the insured yield. The total indemnity equals this yield shortfall, times the indemnity price, times acres insured.
Catastrophic Risk Protection Endorsement (CAT) coverage provides a lower level of coverage on yield losses at a low cost to producers. CAT pays indemnities at a rate of 55 percent of the established price of the commodity when farm yield losses are more than 50 percent. CAT premiums are paid by RMA, but producers must pay an administrative fee for each crop insured. The administrative fee charged to producers was raised under the 2018 Farm Act, from $300 to $655 per crop per county. CAT coverage is not available on all types of policies. Coverage above the CAT level is often referred to as "buy-up" coverage.
A yield version of the Area Risk Protection Insurance (ARPI) policies uses county yields as the basis for determining a loss (similar to the former Group Risk Plan, or GRP). When the county yield for the insured crop falls below the trigger level chosen by the farmer, an indemnity is paid. Yield coverage levels that were available under ARPI Yield Protection policies were raised by the OBBBA to up to 90 percent of the expected county yield. ARPI premiums are usually lower than those for individual insurance, but an individual farmer's crop loss may not be completely covered if the county yield does not suffer a similar level of loss. This type of insurance is best suited to farmers whose crop losses typically follow the county pattern.
Dollar Plan coverage pays for both quantity and quality yield losses and is limited to some high-value crops (e.g., fresh market tomatoes and strawberries). This coverage guarantees a dollar value per acre rather than a particular yield level.

Revenue Insurance Plans

Revenue Protection (RP) provides protection against a farmer’s gross revenue (i.e., price times yield), falling below some guaranteed level. Guaranteed revenue is equal to the farmer’s elected coverage level (50 to 85 percent), times the APH yield, times the higher of (a) the base market price. The level is an average of the harvest-time futures price for a month prior to planting; or (b) the month-long harvest market price for the last month of the contract. When a farmer’s actual revenue (calculated as realized yield times the harvest market price) is below the guaranteed revenue, RP pays an indemnity equal to the difference between those two amounts.
Farmers can choose between RP’s standard option, where the revenue guarantee is determined using either the higher of the preplanting price or the harvest price, or the “harvest price exclusion” option where the revenue guarantee is determined using only the preplanting price. The second option carries a lower premium, called the Revenue Protection with Harvest Price Exclusion (RP-HPE) policy.
A revenue version of the ARPI uses county-level outcomes instead of farm-level outcomes when calculating revenue coverage levels and actual revenue (similar to the former Group Risk Income Protection plan of insurance, or GRIP). Farmers may select revenue coverage levels from 70 to 95 percent of expected county revenue, where county revenue is equal to the historic county yield times the relevant futures price prior to planting. Actual county revenue is calculated as the actual county yield times a month-long average of the nearby futures price at harvest time. ARPI pays indemnities only when the average county revenue for the insured crop falls below the revenue chosen by the farmer.
Whole Farm Revenue Protection (WFRP) insures the revenue for all commodities on the farm under one policy. WFRP replaced Adjusted Gross Revenue (AGR) and AGR Lite coverage in 2015. The plan is tailored for farms with up to $17 million in insured revenue, including farms with specialty or organic commodities (both crops and livestock)—or those marketing to local, regional, farm-identity preserved, specialty, or direct markets. The share of revenue from livestock and livestock products and from greenhouse and nursery crops is limited to $2 million each. The plan uses information from a producer’s Schedule F tax forms to calculate the policy revenue guarantee. In 2021, RMA began offering a new Micro Farm policy option through WFRP. Micro Farm features simplified recordkeeping requirements. These features consider certain market readiness and post-production costs as allowable revenue, and the policy is available to producers with $350,000 or less in approved revenue.
Crop and Livestock Income Protection (CLIP) provides a form of umbrella revenue coverage for producers with two or more underlying RP policies. CLIP offers a higher level of overall coverage, with premium savings accruing from diversification of risk across each of the covered commodities. CLIP is available in selected U.S. counties in 13 U.S. States, beginning with the 2026 crop for crops with RP policies and spring sales closing dates.

Margin Coverage Option (MCO)

MCO offers area-based coverage against declines in operating margin (revenue minus input costs). MCO pays an indemnity when the area margin falls below 90 or 95 percent of the expected margin, depending upon the coverage level elected by the producer. Margins are calculated using specific input baskets for each covered crop. MCO coverage is only available for corn, cotton, grain sorghum, rice, soybeans, and spring wheat for select counties in particular States for each eligible crop. MCO must be purchased as an endorsement to an underlying yield protection, revenue protection, or actual production history policy.

Supplemental Coverage Option (SCO)

The SCO offers producers the opportunity to purchase area-based insurance coverage in combination with traditional crop insurance policies. Producers may cover a portion of the deductible of their underlying crop insurance policy (yield or revenue), with payments being determined on an area (generally county) basis. The more closely an individual producer’s yields vary in correlation with the county average, the better the program will cover individual farm losses. The OBBBA included provisions raising both the SCO coverage level and premium support for SCO. In the wake of these changes, SCO policies provide additional coverage of the layer of crop value between the coverage level of the underlying insurance policy and 90 percent, at a fixed premium subsidy rate of 80 percent.

Stacked Income Protection Plan (STAX)

STAX provides revenue insurance policies to producers of upland cotton. Similar to SCO, STAX policies are area policies, basing the loss calculation on the difference between expected and actual area average revenues rather than on individual farm losses. Unlike SCO, which must be purchased in conjunction with a traditional crop insurance policy, cotton producers may purchase STAX either in conjunction with their insurance policies or as stand-alone policies. Policies may cover up to 20 percent of revenue in 5-percent increments. Federal subsidies cover 80 percent of producers’ premiums. Producers who enroll seed cotton-base acres on a farm under ARC or PLC may not purchase STAX policies for any upland cotton acres on that farm.

Index Insurance Products

The Hurricane Insurance Protection—Wind Index (HIP-WI) Endorsement—introduced in early 2020, covers a portion of the deductible of a producer’s underlying crop insurance policy when the county, or a county adjacent to it, is within the area of sustained hurricane-force winds from a named hurricane. HIP-WI coverage can be combined with SCO policies and with STAX policies that are not stand-alone. The HIP-WI Endorsement provides coverage for more than 70 different crops and is available in counties in the vicinity of the Gulf of Mexico and the Atlantic Ocean, as well as Hawaii. Beginning with the 2023 crop year, HIP-WI was expanded to include a Tropical Storm Option for damage caused by strong weather systems that are not categorized as hurricanes. The option offers coverage for damage caused by named tropical storms, with maximum sustained winds exceeding 34 knots and precipitation exceeding 6 inches over a 4-day period. Both the wind trigger and precipitation trigger thresholds must be reached for an indemnity to be paid under the Tropical Storm Option.
Pasture, Rangeland, Forage (PRF) Insurance—available in the 48 contiguous States since 2016 and available in Hawaii beginning with the 2025 crop year—provides coverage on pasture, rangeland, or forage acres that is based on a Rainfall Index rather than actual losses. The Rainfall Index uses the grid system developed by the National Oceanic and Atmospheric Administration Climate Prediction Center (NOAA CPC) to determine precipitation amounts within an area. Insured acres are assigned to one or more of these NOAA grids based on their location. PRF coverage is designed to help protect a producer’s operation from the risks of forage loss due to the lack of expected precipitation during specific intervals.
Fire Insurance Protection—Smoke Index (FIP-SI)—launched for grape growers in several California counties as a pilot in 2025 and expanded to growers in Idaho, Oregon, and Washington in 2026—covers a portion of the deductible of Grape Crop Provisions when the insured county experiences a minimum number of Smoke Events during the insurance period. Smoke Events are determined by the FCIC, in accordance with the Smoke Index Data Provisions.

Livestock Insurance Plans

RMA offers several different types of insurance coverage for livestock:

Livestock Gross Margin policies provide protection against declines in the margin between feed costs and the market value of livestock or milk and are available for cattle, dairy, and swine.
Livestock Risk Protection policies provide protection against declines in market prices of insured livestock and are available for fed cattle, feeder cattle, and swine.
Dairy Revenue Protection provides protection against a decline in revenue from milk sales.
Weaned Calf Risk Protection provides protection for beef cow-calf producers against declines in weaning weights and loss of revenue in Colorado, Nebraska, South Dakota, and Texas.