Texas All Lines Adjuster Practice Test

What does the Federal Crop Insurance Act accomplish?

1. It eliminates all risks for farmers

2. It establishes the Federal crop insurance program

3. It requires private insurance for farmers

4. It governs all agricultural practices

The correct answer is: It establishes the Federal crop insurance program

The Federal Crop Insurance Act establishes the Federal crop insurance program, which is designed to provide financial protection to farmers against crop losses due to natural disasters and other risks. This act plays a significant role in the agricultural sector by enabling farmers to purchase insurance that mitigates the financial impact of unforeseen events such as droughts, floods, or pest infestations. The program aims to stabilize farm income and contribute to the overall security of the food supply in the United States. By supporting farmers in this way, the act helps ensure that they can remain viable and continue to produce food for consumers. The other choices do not accurately reflect the specific aim of the act. It does not eliminate all risks for farmers, as various risks will always be present in agriculture. It does not mandate private insurance exclusively; the act supports a public program that integrates with private insurers. Furthermore, the act does not dictate agricultural practices; rather, it focuses specifically on providing insurance options for crop-related risks.