One of the reasons private crop insurance
markets have not developed is the
relatively low demand for crop insurance.
Despite large subsidies in the United States,
crop insurance participation historically
has been relatively low. Farmers and
ranchers use a variety of risk management
strategies to mitigate the risks they face
(Harwood, Heifner, Coble, Perry, and
Somwaru, 1999; U.S. GAO, 1999), many
of which compete with crop insurance.
These include futures and options
markets, contracting, cultural practices
that reduce crop loss (e.g.