Federal Crop Insurance Reform Act of 1994

The Federal Crop Insurance Reform Act of 1994 is Title I of P.L. 103-354. Beginning with the 1995 crops, it modified the federal crop insurance program by authorizing a new catastrophic (CAT) coverage level available to farmers. The premium on this level of coverage (crop losses in excess of 50% receiving a payment of 60% (now, 55%) of the market price of the insured crop) is 100% subsidized by the government, but requires a farmer to pay a $50 per crop per county administrative fee (since raised to $100 per crop). The Act allows farmers to purchase additional insurance coverage providing higher yield or price protection levels, with the premium on this buy-up coverage partially subsidized by the government. The Act also created the Noninsured Assistance Program (NAP), a permanent disaster payments program for crops not covered by crop insurance. The 1994 Act amended and in many cases suppressed major portions of the Federal Crop Insurance Act of 1980 (P.L. 96-365) which serves as the authorizing statute for the federal crop insurance program. The 1980 Act expanded the scope of the crop insurance program and permitted USDA to subsidize farmer premium payments. The Agriculture Risk Protection Act of 2000 (P.L. 106-224) made subsequent enhancements and reforms to the crop insurance program.

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