The US Federal Crop Insurance Program: A Case Study in Rent-Seeking
52 Pages Posted: 3 Oct 2017
Date Written: September 20, 2017
This study examines how, in the context of three major crop insurance legislative initatives by the US government in 1989, 1994, and 2000, regulatory and other innovations to the federal crop insurance program have been designed to jointly benefit farm interest groups and the agricultural insurance industry, with spillover benefits for credit institutions that make loans to farmers. The analysis clearly demonstrates that those initiatives have resulted in considerable and generally increasing costs to US taxpayers and that they evolved as the result of explicit or implicit coalitions between farm interest groups and crop insurance interest groups.
Keywords: rent-seeking, agricultural subsidies, crop insurance, political economy
JEL Classification: H2, L1, Q0, Q1
Suggested Citation: Suggested Citation