The federally subsidized crop insurance system is skewed toward large-scale growers of crops such as corn and soybeans, says the Land Stewardship Project in the second of three white papers on the program. The nonprofit group says subsidies, which cover as much as 71 cents of each $1 of premium, reduce out-of-pocket costs for large growers and help them out-bid small or diversified growers for land. Insurance policies that guarantee a large fraction of crop revenue encourage farming of marginal land more susceptible to adverse weather, says LSP.
“While three-quarters of U.S. farms do not have crop insurance, it is widely used by producers of the commodity crops favored by U.S. farm policy – corn, soybeans, cotton, wheat and rice, for example. Those crops receive expansive coverage, while small grains, hay, and produce are generally insurable only in certain counties where they are grown on an industrial scale. For example, in 2013 strawberries were only insurable in six California counties,” says the white paper. It quotes Minnesota farmers who say there should be a cap on premium subsidies per farmer and on how large a portion of revenue can be guaranteed.
The crop insurance industry says “insurance is essential to the sucess of farmers and the country.”