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Crop Insurance as a Payment Program

Author

Listed:
  • Zulauf, Carl
  • Schnitkey, Gary

Abstract

Given Federal premium subsidies, crop insurance will provide payments to farmers that exceed the premiums they pay. Payments to farmers have increased over time as premium subsidies have increased. This article examines crop insurance as a payment program. It uses data for barley, corn, cotton, grain sorghum, oats, peanuts, rice, soybeans, and wheat for the 1989-2023 crop years from USDA, RMA’s (US Department of Agriculture, Risk Management Agency) Summary of Business. Premium subsidies are used to measure long-term expected payments to farmers. Premium subsidies have increased notably in dollars per acre and relative to production cost. The variation across crops has also widened notably, underscoring the role of crop insurance as a payment program.

Suggested Citation

  • Zulauf, Carl & Schnitkey, Gary, 2025. "Crop Insurance as a Payment Program," farmdoc daily, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics, vol. 14(160).
    • Handle: RePEc:ags:illufd:358446
    DOI: 10.22004/ag.econ.358446
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