The Growth of the Federal Crop Insurance Program, 1990—2011

• Published in: American journal of agricultural economics 2013-01, Vol.95 (2), p.482-488
• Main Author: Glauber, Joseph W.
• Format: Article
• Language: English
• Subjects: Administration; Commodities; Crop economics; Crop insurance; Crops; Delivery costs; Disasters; Economic development; Farms; Federalism; Is Subsidizing Farm Crop and Revenue Insurance Economically Justified?; Marginal costs; Revenue; Rural development; Subsidies; U.S.A
• ISSN: 0002-9092; 1467-8276
• DOI: 10.1093/ajae/aas091

In early 1990, the Bush Administration put forward its proposals for the 1990 Farm Bill. Among a myriad of recommendations on commodity programs, conservation, trade, research, and rural development was a solitary recommendation on disaster assistance policy: eliminate the federal crop insurance program, which had existed since 1938, and replace it with a standing disaster program. The crop insurance program was criticized for low participation (less than 25% of the eligible area was enrolled in the program prior to 1989), poor financial performance, and the failure to prevent the passage of costly ad hoc disaster legislation when crop losses were widespread. The proposal noted that the combined costs for federal crop insurance and ad hoc disaster assistance averaged more than $1.1 billion annually from 1981-88 (U.S. Department of Agriculture 1990). While Congress failed to act on the Bush administration's recommendation, frustration with the federal crop insurance program was widely felt (Glauber and Collins 2002). Reprinted by permission of the American Agricultural Economics Association