Why do we subsidize crop insurance?

Keith H. Coble, Barry J. Barnett

Research output: Contribution to journalArticlepeer-review

71 Scopus citations


The farm policy debate in the US continues to evolve rapidly as priorities and perceptions change. For some time now risk protection has been the primary rationale used to justify federal farm programs; hence the commonly expressed need for a farm safety net. As the 2008 farm bill neared its expiration and debate began on a new farm bill, direct payments became perceived as the least politically defensible of the existing farm programs, since direct payments provide no risk protection. Thus, it became widely agreed that direct payments would be reduced or eliminated to reach budget reduction targets. Some may argue that policy-makers adopted and maintained crop insurance premium subsidies simply as a mechanism for transferring federal dollars to crop farmers. It is certainly true that if crop insurance policies are priced correctly, premium subsidies effectively transfer income from taxpayers to crop insurance purchasers.

Original languageEnglish
Pages (from-to)498-504
Number of pages7
JournalAmerican Journal of Agricultural Economics
Issue number2
StatePublished - Jan 2013

ASJC Scopus subject areas

  • Agricultural and Biological Sciences (miscellaneous)
  • Economics and Econometrics


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