Cornhusker Economics

The Role of Farm Size in Crop Insurance

The role of farm size in crop insurance has been a reoccurring U.S. political issue with multiple attempts at legislation proposing to limit premium subsidies to large producers. For instance, in 2015 bill S.2244, amongst other items, proposed to cap crop insurance premium subsidies at $40,000 per year1. The most recent attempt was made by the current administration in mid-2017, where they introduced the same premium subsidy cap of $40,000 per year. The first mention of the $40,000 figure emerged from a report sanctioned by the Government Accountability Office in 2012 (GAO-14-700, 2014)2. Eventually, no premium subsidy caps were included in the 2018 Farm Bill due to push back from farm and insurance groups3. However, premium subsidy restrictions have continually remained at the forefront of crop insurance policy debate since 2012.

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2019 Cornhusker Economics