Crop Insurance Ensures the Big Get Bigger

How a Safety Net Became a Farm Policy Disaster: White Paper No. 2

Strategies to manage risk and recover from disasters are needed to guarantee a stable supply of food and fiber, and to ensure that farmers don’t go under after one bad year. These goals are in the public interest, and federal government support of diverse risk management strategies is good policy.

In recent years, subsidized crop insurance has expanded dramatically to become the country’s biggest federal farm program. The Imagefederal government has increased funding for the program and more farmers than ever are participating. But instead of functioning as common sense risk management for all farmers, the current form of crop insurance funnels public dollars to the largest crop operations, enabling them to outcompete family farmers for land and other resources. It is highly targeted to promote the maximum production of a few commodity crops, and is biased against stewardship farming practices that are themselves proven risk management strategies. Crop insurance has become a primary vehicle for using public funds to concentrate agricultural wealth in our country.

Main Points of this White Paper

  • Crop insurance benefits the largest agricultural operators most. They receive the vast majority of crop insurance premium subsidies and insurance payouts, and use these disproportionate benefits to outcompete family farmers for land and other resources.
  • Crop insurance is the new vehicle for using public funds to concentrate agricultural wealth in this country. This consolidation increases economic and environmental risk and threatens community health at the public’s expense.
  • Twenty-two percent of U.S. farmers use crop insurance, and the majority of the benefit goes to a tiny fraction of producers. Despite the narrow group of private interests that benefit disproportionately from the program, it has imposed a $58 billion price tag on the American people over a 10-year period.

Download White Paper No. 2: Crop Insurance Ensures the Big Get Bigger here.