Legal Definitions - RMA

RMA stands for the Risk Management Agency.

The Risk Management Agency (RMA) is a federal agency within the United States Department of Agriculture. Its primary mission is to help agricultural producers manage financial risks through federal crop insurance and other risk management tools. The RMA researches, develops, and subsidizes crop insurance products, ensuring that farmers have access to a safety net that protects them from losses due to natural disasters, market fluctuations, and other unforeseen events affecting their crops and livestock.

• Example 1: Protecting a Wheat Harvest

  A wheat farmer in Kansas is concerned about potential drought conditions impacting their upcoming harvest. To mitigate this financial risk, the farmer purchases a federal crop insurance policy. The specific terms, coverage options, and premium subsidies for this policy are all established and overseen by the RMA. The agency ensures that the insurance product is available, affordable, and designed to protect the farmer's investment against yield losses caused by adverse weather.

• Example 2: Recovery After a Flood

  Following severe flooding that destroys a significant portion of a corn crop in Iowa, a farmer who had purchased federal crop insurance files a claim. The RMA plays a crucial role in this process by setting the guidelines for how claims are assessed and paid out. While private insurance companies administer the policies, the RMA ultimately backs these policies and ensures that the farmer receives the financial compensation necessary to recover from the disaster, adhering to the program's regulations.

• Example 3: Developing New Insurance Products

  As the agricultural landscape changes, new risks emerge, such as specific regional pest outbreaks or shifts in commodity prices. The RMA actively conducts research and develops new or modified insurance products to address these evolving challenges. For instance, if a new disease threatens a particular specialty crop, the agency might work to create a tailored insurance option to cover losses from that specific peril, demonstrating its role in adapting risk management solutions to current needs.