Posted September 9, 2014
The cost
of the federal crop insurance program and farm sector income and wealth has
grown significantly since 2003. The cost has risen from an average of $3.4
billion per year in 2003 to $8.4 billion a year for fiscal years 2008 through
2012, according to the U.S.
Government Accountability Office’s (GAO) website.
Federally
subsidized crop insurance, which farmers can buy to help manage the risk
inherent in farming, has become one of the most important programs in the farm
safety net. Revenue policies, which protect farmers against crop revenue loss
from declines in production or price, are the most popular policy type accounting
for 80 percent of all premium subsidies.
The GAO
was asked to investigate the cost of the crop insurance program. This report
examines "(1) trends in federal crop insurance costs and farm sector income and
wealth from 2003 through 2012 and (2) the potential savings to the government
and impacts on farmers, if any, of reducing federal premium subsidies for
revenue policies."
GAO
analyzed U.S. Department of Agriculture (USDA) crop insurance program data and
farm sector income and wealth data from 2003 through 2012, reviewed economic
literature and documents from stakeholders, including farm industry groups and
researchers, and interviewed USDA officials.
For more
information, the GAO report is available here. The highlights of the
report are available here.
For more information on crop insurance programs, please
visit the National Agricultural Law Center’s website here.
