Federal Crop Insurance Corporation Program Fund Department of Agriculture

Risk Management Agency (RMA), through Federal Crop Insurance Corporation (FCIC), provides crop insurance to American farmers and ranchers. Private-sector insurance companies sell and service the policies. RMA develops and/or approves the premium rate, administers premium and expense subsidies, approves and supports products, and reinsures the companies. RMA also sponsors educational and outreach programs and seminars on the general topic of risk management. FCIC spent $13.7 billion to operate the Program during crop year 2013.

Agency Accountable Official: Kevin Concannon, Under Secretary for Food, Nutrition, and Consumer Services

Total Payments
$11.5B
Improper Payments
$0.2B
Improper Payment Rate
2.02%

Supplemental Measures

Current Measure: 2.64%

Target: No target established

Description: This measure compares the insured acres reported to RMA to the farmed acres reported to FSA. For reinsurance year (RY) 2014, approximately 80% of all producers reported the same acres to both RMA and FSA. However, approximately 20,000 producers reported very large (>100 acres) differences. Concentrating on discrepancies that are greater than 100 acres and changing behavior for those producers will have the most financial impact. RMA’s goal is to reduce the number of acreage reporting errors by generating a list of producers with large acreage discrepancies to give to the insurance companies for further investigation. Inaccurate acreage reporting leads to improper premium subsidy and indemnity payments to the producers. This measure reflects, as a percentage, the number of Eligible Crop Insurance Contracts (ECICs) with acreage discrepancies greater than 100 acres reported to FSA and RMA divided by the total number of ECICs. Inaccurate acreage reporting can cause improper premium subsidy and indemnity payments to the producers.

Update Frequency: Annually

Data Current as of: June 30, 2015


Program Comments

The Federal crop insurance program is a self-certification program where participants certify as to the correctness of information (acres, share, production, etc.) as a basis for program participation. This information may be subject to further review and verification to determine its accuracy. For this type of program, the primary root causes of errors and improper payments are due to individual program participants’ (producers, companies, agents, and/or loss adjusters) failure to correctly interpret, provide and/or process information in accordance with policy and/or procedure requirements for determining eligibility and program payment amounts. Additional information on the program is also provided annually in the USDA Agency Financial Report.