Can Crop Insurance Replace Ad Hoc Disaster Assistance?
Currently, crop insurance participation—defined as insured acres as a percent of planted acres—is about 80 percent. Coverage levels at which producers are insuring are generally high. But coverage levels continue to be low in some regions and for some crops. Thus, while most U.S. crop production is insured, pockets of inadequate protection raise the prospect of ad hoc disaster assistance. Drought has been the source of the largest share of crop insurance indemnities. From 1989 to 2004, drought was listed as the primary cause of loss for about 40 percent of indemnities. Excessive moisture, rain, or flood accounted for about 30 percent, followed by frost, freeze or cold weather, and hail, each of which accounted for about 10 percent of indemnities. Does crop insurance need to be strengthened for it to be the primary form of disaster aid to farmers and ranchers? The use of premium subsidies to encourage insurance participation and to raise coverage levels is costly. Additional subsidies a
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- Can Crop Insurance Replace Ad Hoc Disaster Assistance?
