WORLD TRADE  
ORGANIZATION   
G/AG/N/USA/86 
10 September 2012 
 (12-4806) 
Committee on Agriculture Original:   English 
 
 
 
NOTIFICATION  
 
 
The following submission, dated 5 September 2012, is being circulated at the request of the 
Delegation of the United States of America .  The notification concerns new or modified domestic 
support measures exem pt from reduction ( Table DS:2 ). 
  G/AG/N/USA/86 
Page 2  
 
  Table DS:2 
DOMESTIC SUPPORT:  United States  
Notification under Article 18:3 of the Agreement:  
New or modified domestic support measures exempt from reduction  
 
(1) Full title of measure:   Title XII – Crop Insurance and Disaster Assistance Programs 
 (2) Domestic legislation reference:   Public Law 110-246, Food, Conservation, and Energy Act 
of 2008 (18 June 2008) 
 
(3) Detailed description of measure with reference to criteria, i.e., those in:   Provisions are 
consistent with criteria in  Annex 2, paragraph 2. 
 
Outlays under the categories "agency administ ration and operating expenses, administrative 
and operating reimbursements to operators, and underwriting ga ins to insurers" meet the 
general criteria of Annex 2, paragraph 1 (support is provided through a publicly-funded 
government programme and does not involve tran sfers from consumers, and there is no price 
support to producers; additionally, there are no trade-distorting effects or effects on production).  In addition, the outlays meet the ge neral criteria in paragr aph 2 (expenditures, or 
revenue foregone) in relation to programmes whic h provide services or benefits to agriculture 
or the rural community and are not direct payments to producers or processors. 
 
Agency administration and operating expenses .  The crop insurance programme is 
implemented by the Risk Management Agency (R MA) of the U.S. Department of Agriculture 
(USDA).  RMA operates and manages the Fede ral Crop Insurance Corporation (FCIC), a 
government corporation within USDA authorized to carry out the crop insurance programme.  
RMA, through FCIC, provides crop insurance to  American producers.  Private-sector 
insurance companies sell and service the polic ies.  RMA develops and/or approves the 
premium rate, administers premium and expen se subsidies, approves and supports products, 
and reinsures the companies.  In addition, RMA sponsors educational and outreach programmes and seminars on the gene ral topic of risk management.  
 
Administrative and operating reimbursements to operators .  RMA pays a portion of the crop 
insurance companies' administrative and ope rating expenses incurred for delivering crop 
insurance policies. 
 
Underwriting gains to insurers .  RMA shares underwriting gains and losses with the private-
sector companies under the Standard Reinsuran ce Agreement (SRA), which is a cooperative 
agreement between FCIC and an insurance co mpany.  Reinsurance agreements establish 
terms under which FCIC provides subsidies a nd reinsurance on eligible crop insurance 
contracts sold or reinsured by the insurance company. 
 
(4) Cost of measure:   Costs of delivering crop insurance will vary annually.  RMA agency 
expenditures are subject to Congressional budgeta ry appropriations on an annual basis.  
Administrative and operating reimbursements to operators can also vary depending on the 
number of contracts and premium values.  The nature of the crop insurance business means that gains and losses on underwriting can vary substantially year-to-year.  Net underwriting 
gains to insurers depend on a number of factor s, including premium levels, participation in 
the crop insurance programme, level of premiums  retained by companies under the Standard 
Reinsurance Agreement (the agreement between  the crop insurance companies and the Risk  G/AG/N/USA/86 
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  Management Agency that governs the provision of crop insurance), and actuarial performance 
for that year. 
 (5) Date of entry into effect:   18 June 2008 
 
(6) Period of application:   Provisions of the crop insurance programme are permanently 
authorized, as amended. 
 
(7) Products to principally benefit (if any individual product(s)):   Currently over 100 products 
are covered by crop insurance policies. 
 
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