Wednesday, October 05, 2011

A Hole in the Crop Insurance Safety Net

FarmDocDaily has a post pointing out a hole in crop insurance as a one-stop, do-it-all safety net: periods when crop prices are low for multiple years (mid 80's, late 90's).  (His graph misled me, because it compares the 5-year average price with the projected price used for setting crop insurance.  I believe the actual price for the year would show more variability.) Of course, in such years the political pressure becomes such that Congress will do something to patch the hole; at least, that's been the experience in the past but whether it works that way in the context of large deficits is another question.

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