The crop insurance industry enjoyed another banner year in 2007, collecting $6.5 billion in premiums yet paying out only $3.2 billion in losses. I estimate that the industry will collect a record $2.8 billion from taxpayers. In contrast, the net amount that farmers received from the program in 2007 was only $750 million. Interestingly, since the beginning of this decade, the $11.3 billion in net payments to farmers (indemnities received minus farmer-paid premiums) is about equal to the amount that taxpayers have paid the industry ($11.1 billion). Overall, taxpayers have spent more than $22 billion since 2000 delivering about $11 billion in net payments to farmers, making crop insurance one of the least-effi cient means by which taxpayers support the farm sector
Babcock, Bruce A.
"Corn Belt Contributions to the Crop Insurance Industry,"
Iowa Ag Review: Vol. 14
, Article 1.
Available at: http://lib.dr.iastate.edu/iowaagreview/vol14/iss2/1