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Options to Reduce the Budgetary Costs of the Federal Crop Insurance Program

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  • Congressional Budget Office

Abstract

The federal crop insurance program helps protect agricultural producers from losses by offering insurance for their crops—principally corn, soybeans, wheat, and cotton. Federal spending on the program has averaged about $9 billion annually over the past five years. That spending has mostly gone toward premium subsidies for agricultural producers; a smaller portion reimburses private insurance companies for the administrative and operating costs of providing crop insurance. The government also shares in those companies’ losses and gains from the policies.

Suggested Citation

  • Congressional Budget Office, 2017. "Options to Reduce the Budgetary Costs of the Federal Crop Insurance Program," Reports 53375, Congressional Budget Office.
    • Handle: RePEc:cbo:report:53375
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    File URL: https://www.cbo.gov/system/files/115th-congress-2017-2018/reports/53375-federalcropinsuranceprogram.pdf
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    References listed on IDEAS

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    1. Zulauf, Carl & Schnitkey, Gary, 2016. "Increasing Crop Insurance Coverage Levels: An Assessment," farmdoc daily, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics, vol. 6, June.
    2. Keith H. Coble & Thomas O. Knight & Rulon D. Pope & Jeffery R. Williams, 1996. "Modeling Farm-Level Crop Insurance Demand with Panel Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 439-447.
    3. Woodard, Joshua, 2016. "Estimation of Insurance Deductible Demand under Endogenous Premium Rates," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236151, Agricultural and Applied Economics Association.
    4. Barry K. Goodwin, 1993. "An Empirical Analysis of the Demand for Multiple Peril Crop Insurance," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(2), pages 425-434.
    5. Elizabeth Marshall, & Marcel Aillery, & Scott Malcolm, & Ryan Williams,, 2015. "Climate Change, Water Scarcity, and Adaptation in the U.S. Fieldcrop Sector," Economic Research Report 262203, United States Department of Agriculture, Economic Research Service.
    6. White, T. Kirk & Hoppe, Robert A., 2012. "Changing Farm Structure and the Distribution of Farm Payments and Federal Crop Insurance," Economic Information Bulletin 120309, United States Department of Agriculture, Economic Research Service.
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    Cited by:

    1. Robert W. Klein & Harold Weston, 2020. "Government insurance for business interruption losses from pandemics: An evaluation of its feasibility and possible frameworks," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 23(4), pages 401-440, December.

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    More about this item

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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