Crop Insurance

Federal crop insurance is a highly taxpayer subsidized program that allows agricultural producers to shift their business risk onto taxpayers. Perennially the most expensive farm subsidy program, crop insurance is significantly different than the home, car, or health insurance policies that are familiar to most people. Instead of individuals or companies covering the full cost of their insurance protection, the federal taxpayer pays, significantly subsidizing insurance policy holders, agents, and companies.

Beneficiaries, on average, pay less than half the costs of their insurance policies. The insurance companies that provide crop insurance carry little actual risk and instead are paid handsomely by Uncle Sam who also bears the burden of losses. Additionally, crop insurance can be used to insure an expected level of revenue, meaning insurance payouts can kick in even after a bountiful harvest.

With our nation facing unprecedented levels of burdensome debt, farm income entitlements, including federally subsidized crop insurance, must be reformed. The goal must be to create a cost-effective, transparent safety net for agricultural producers that is responsive to current needs and conditions, and in which all parties are held accountable for producing results benefitting the public interest.