Do WTO rules further crop insurance as a solution to producer risk?
The U.S. experience suggests that the WTO rules on crop insurance do not generally discourage the expansion of crop insurance. Neither do they provide much of an incentive to switch support from current production distorting price and income support programs to crop insurance. While studies have concluded that crop insurance leads to higher production, the estimated effects are generally small. Crop insurance, depending on its structure, may be less production distorting than many other policy interventions, however, current and Doha-proposed rules remain ambiguous and provide little incentive for a country to make crop insurance the primary safety net. To be green box, crop insurance would have to be an income policy with a 30-percent deductible. This would not be an attractive policy for U.S. producers. Thus, the U.S. program provides lower deductibles and must be notified as amber box. Yet, the U.S., partly by reporting the level of support as net indemnities and nonproduct-specific
