Crop Insurance, Disaster Assistance, and the Role of the Federal Government in Providing Catastrophic Risk Protection
Since 1980, the principal form of crop loss
assistance in the United States has been
provided through the Federal Crop
Insurance Program. The Federal Crop
Insurance Act of 1980 was intended to
replace disaster programs with a
subsidized insurance program that
farmers could depend on in the event of
crop losses. Crop insurance was seen as
preferable to disaster assistance because
it was less costly and hence could be
provided to more producers, was less likely
to encourage moral hazard, and less likely
to encourage producers to plant crops on
marginal lands. Despite substantial
growth in the program, the crop insurance
program has failed to replace other disaster
programs as the sole form of...
