Fifty Years of Growth and the Road Ahead for Crop Insurance Penetration in the United States

By: Francis Tsiboe

Federal crop insurance, delivered through the Federal Crop Insurance Program (FCIP), has become one of the most important tools farmers use to manage the financial risks of weather, pests, and volatile markets. Over the past five decades, policy changes have expanded who is covered, what crops can be insured, and how affordable the program is for producers across the country. This brief traces that evolution from the program’s modest beginnings to its current scale within the U.S. farm safety net and describes how reforms under the One Big Beautiful Bill Act (OBBB, P.L. 119-21) could shape participation, coverage levels, and financial exposure in the years ahead.

From a New Deal Experiment to Sustained Expansion

Federal crop insurance began as a New Deal experiment. The Federal Crop Insurance Act of 1938 authorized nationwide multiple-peril coverage, but for four decades the program remained a limited pilot. It was initially confined to wheat and a small number of commodities; by 1980, only about half of U.S. counties and 26 crops were eligible, and participation remained modest (Knight and Coble, 1997; Glauber, 2013). From 1976 to 1980, the share of selected crop acreage insured grew by an average of 2.08 percent per year.

The Federal Crop Insurance Act of 1980 marked the start of the program’s first sustained expansion. It introduced a 30 percent premium subsidy at the 65 percent coverage level, established the public-private delivery system of Approved Insurance Providers, and was intended to replace standing disaster assistance as producers’ primary catastrophic protection. Between 1980 and 1993, the share of selected commodity acreage insured rose from 8.68 to 30.96 percent, liability as a share of production value increased from 4.68 to 13.74 percent, and insured acres as a share of farm acres moved from 2.53 to 8.57 percent.

The Modern Program Takes Shape

Following the 1993 Midwest floods, the Federal Crop Insurance Reform and Department of Agriculture Reorganization Act of 1994 raised subsidies at higher coverage levels, introduced revenue products, and created fully premium-subsidized catastrophic coverage that was initially tied to eligibility for other farm programs. Selected commodity acreage insured increased from 35.8 percent in 1994 to 81.75 percent in 1995, when more than 220 million acres enrolled. The 1996 Farm Bill created USDA’s Risk Management Agency and repealed the mandatory link, while participation remained well above pre-1994 levels.

The Agricultural Risk Protection Act of 2000 raised subsidies again. Producer-specific rating and nationwide revenue products coincided with broader demand, including among specialty-crop growers. From 2001 to 2007, all four penetration measures examined in the brief rose by roughly 0.73 to 5.01 percent per year. During 2008 to 2013, all four measures again increased, by about 1.07 to 1.90 percent annually, and the selected commodity share reached 86.72 percent by 2013.

Recent Farm Bills Consolidate the Program’s Role

The 2014 Farm Bill added the Supplemental Coverage Option (SCO) and, for cotton, the Stacked Income Protection Plan to cover shallow losses. Between 2014 and 2017, the insured-acre and liability shares rose even as the selected commodity share declined slightly and the aggregate coverage level remained essentially flat. The 2018 Farm Bill extended coverage to specialty crops and hemp, improved access for beginning, veteran, and underserved producers, and added the Enhanced Coverage Option (ECO). Through 2025, the selected commodity share moved from 85.17 to 93.04 percent, while insured acres reached 64.03 percent of U.S. farm acres.

Across 1976 to 2025, expansion occurred through phase-by-phase policy changes rather than a smooth trend. Depending on the measure, those phases correspond to mean annual gains of 1.33 to 9.33 percent, with net benefits concentrated among Great Plains and Corn Belt producers (Tsiboe et al., 2026b).

Figure 1: Nationwide Penetration of the U.S. Federal Crop Insurance Program, 1976–2025.

Note: Aggregate coverage level equals total FCIP insured liability divided by potential liability. Production value is reported by calendar year; FCIP outcomes are reported by crop year. Selected acreage includes major row crops and sugarcane. The four measures use different denominators and are not directly comparable.

Source: NDSU Agricultural Risk Policy Center using data from USDA Risk Management Agency, USDA National Agricultural Statistics Service, and USDA ERS Farm Income and Wealth Statistics, as of August 13, 2026.

OBBB Reforms and Early 2026 Signals

The OBBB, enacted July 4, 2025, introduced one of the most substantial sets of premium-subsidy reforms to the FCIP since the Agricultural Risk Protection Act. The legislation increases premium subsidies across multiple coverage levels, broadens access to revenue and index-based insurance products, strengthens premium support for beginning farmers and ranchers, and aims to streamline administrative processes between Approved Insurance Providers and the Risk Management Agency. These measures are intended to lower producer costs, reduce barriers to participation, and extend the program’s reach into historically underserved production systems, including specialty crops and pasture and forage operations.

Early 2026 sales data provide a first indication of how producers are responding. Under partial OBBB implementation, the subsidy rate for SCO and ECO rose to 80 percent. ECO policies increased from roughly 231,000 in 2025 to 533,000 in 2026, while SCO policies increased from about 63,000 to 314,000 (Tsiboe and Zhao, 2026). Applying historical acres-per-policy relationships, ARPC projects that ECO adoption could reach 61.7 percent of eligible acres and SCO adoption 26.5 percent in 2026, with the largest gains concentrated in major row-crop states and among corn, cotton, soybeans, and wheat.

Because 2026 acreage reporting is still incomplete, these figures are preliminary. They nevertheless point to a substantial near-term expansion in supplemental coverage that would raise insured liability without necessarily changing the share of base acres insured.

Projected 2026 Penetration

Preliminary ARPC projections indicate higher FCIP penetration under the OBBB subsidy schedule. Holding the 2025 denominators constant, liability as a share of crop production value reaches 76.0 percent, up from 71.0 percent in 2025, and the share of selected commodity acreage insured rises from 93.0 to 99.8 percent. These values are mechanical re-scalings of the 2025 shares based on projected changes in insured acres and liability; they are not behavioral forecasts. Because the acreage denominator is held fixed, the 99.8 percent figure approaches 100 percent by construction and should be read as an upper bound rather than a point estimate.

Figure 2: Projected 2026 Federal Crop Insurance Program Penetration Under the One Big Beautiful Bill Act, Relative to the 2025 Baseline.

Note: Projected 2026 values hold the 2025 selected commodity acreage and crop production-value denominators constant and scale the 2025 share by the ratio of insured acres and insured liability between the 2025 and 2026 ARPC outlook releases under the OBBB subsidy schedule. These are mechanical re-scalings, not behavioral forecasts, and they cannot reflect changes in planted acreage or crop prices.

Source: NDSU Agricultural Risk Policy Center outlook releases for the 2025 and 2026 crop years; baseline shares from USDA Risk Management Agency, USDA National Agricultural Statistics Service, and USDA ERS Farm Income and Wealth Statistics, as of August 13, 2026.

The Road Ahead

If the enhanced subsidies lower producer costs as intended, they may be associated with further growth in FCIP participation and insured liability. Whether the changes broaden participation among small- and medium-sized operations, which the OBBB’s subsidy provisions are directed at in part, remains an open question that 2026 and 2027 acreage-reporting data will help answer.

Successive policy reforms aimed at broadening coverage, improving participation, and increasing administrative efficiency coincide with the broadly upward trajectory of the major FCIP penetration measures. In 2025, the selected commodity share reached 93.04 percent and the liability share reached 71 percent. With OBBB implementation and ARPC’s projected 2026 values, both measures are projected higher again, subject to the assumptions described above. Taken together, the evidence describes a program that has moved from a supplemental risk-management tool to a central component of the U.S. farm safety net.

References

Glauber, Joseph W. (2013). The Growth of the Federal Crop Insurance Program, 1990–2011. American Journal of Agricultural Economics 95(2): 482–488. https://doi.org/10.1093/ajae/aas091

Knight, Thomas O. and Keith H. Coble (1997). Survey of U.S. Multiple Peril Crop Insurance Literature Since 1980. Review of Agricultural Economics 19(1): 128–156. https://doi.org/10.2307/1349683

Tsiboe, Francis and Walker Davis (2026). Continued Pasture, Rangeland, and Forage (PRF) Insurance Expansion in 2026. ARPC Brief 2026-08. Agricultural Risk Policy Center, North Dakota State University. https://doi.org/10.22004/ag.econ.396375

Tsiboe, Francis, Walker Davis, and Dylan Turner (2025). Pasture, Rangeland, and Forage (PRF) Insurance Expansion and Emerging Limits to Growth. ARPC Brief 2025-16. Agricultural Risk Policy Center, North Dakota State University. https://doi.org/10.22004/ag.econ.391345

Tsiboe, Francis and Hongxi Zhao (2026). Early Signals for Supplemental Crop Insurance Adoption Under Partial OBBBA Implementation. ARPC Brief 2026-12. Agricultural Risk Policy Center, North Dakota State University. https://doi.org/10.22004/ag.econ.401174

Tsiboe, Francis et al. (2026a). Crop Insurance Penetration in the United States, 2025. ARPC Report 2026-02. Agricultural Risk Policy Center, North Dakota State University.

Tsiboe, Francis et al. (2026b). Size and Growth of the United States Crop Insurance Portfolio, 2025. ARPC Report 2026-01. Agricultural Risk Policy Center, North Dakota State University. https://doi.org/10.22004/ag.econ.401338

Turner, Dylan and Shawn Arita (2025). OBBB Premium Subsidy Increases in Basic, Optional, and Enterprise Units. ARPC Brief 2025-05. Agricultural Risk Policy Center, North Dakota State University. https://doi.org/10.22004/ag.econ.391344