The US Federal Crop Insurance Program: A Case Study in Rent-Seeking

52 Pages Posted: 3 Oct 2017

See all articles by Vincent Smith

Vincent Smith

Montana State University - Bozeman - Department of Agricultural Economics and Economics

Multiple version iconThere are 2 versions of this paper

Date Written: September 20, 2017

Abstract

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

Smith, Vincent, The US Federal Crop Insurance Program: A Case Study in Rent-Seeking (September 20, 2017). Mercatus Research Paper. Available at SSRN: https://ssrn.com/abstract=3046858 or http://dx.doi.org/10.2139/ssrn.3046858

Vincent Smith (Contact Author)

Montana State University - Bozeman - Department of Agricultural Economics and Economics ( email )

Bozeman, MT 59717-2920
United States

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