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Barry K. Goodwin, Vincent H. Smith

The Economics of Crop Insurance and Disaster Aid (Aei Studies in Agricultural Policy)

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ISBN: 0844739081
Издательство: American Enterprise Institute Press
Policies to deal with the consequences of the vagaries of nature have made headlines for several years. Each year when a "disaster" arrives, the administration and Congress compete in generosity toward those farm families in need. At the same time, the ritual question of why crop insurance does not provide the appropriate incentives for risk management is raised once again. This study is the first to provide a comprehensive and in-depth economic analysis of the origins and consequences of U.S. crop insurance and disaster relief programs. After examining these programs in light of market failure rationales for government intervention in agricultural commodity insurance programs, the authors conclude that these arguments provide little basis for such intervention. They investigate the policy options for disaster assistance and crop insurance, beginning with the recognition that current policies are unsatisfactory.