Eleven states had a difference of 1.5 or more percentage points (a "+" sign means insurance share exceeded direct payment share): Texas (+8.8%), North Dakota (+4.1%), South Dakota (+3.3%), Kansas (+1.9%), California (-1.8%), Louisiana (-1.9%), Iowa (-2.0%), Ohio (-2.1%), Minnesota (-2.9%), Nebraska (-3.0%), and Arkansas (-3.8%).Bottomline: Great Plains states with higher risk and more variable production get more crop insurance, non Great Plains states less. As the study observes, it raises the possibility that crop insurance will encourage the shift of production to more risky areas. As a second thought, though, "shift" is perhaps the wrong term; "expansion" might be better. Maybe we should view crop insurance as one measure by which agriculture is adjusting to global warming?
Thursday, April 10, 2014
Who Wins and Loses With Crop Insurance
Farmdocdaily (IL extension) has a post on the state-level distribution of direct payments versus crop insurance. Most states (32 of them) are pretty close in their share but these states differ significantly: