Federal Crop Insurance and The New Farm Bill

From the Washington Post, with a tip of the hat to George Buddy ,
comes a column by Cato people suggesting reform of the federal crop insurance program. I found this quote ironic:

"lawmakers have made several efforts to "reform" crop insurance. But each wave of legislative changes has moved the program further away from economic rationality and exacerbated its distortion of incentives and inefficiency."

It's ironic because the "reformers" have always operated under the flag of "free market competition". To recap, the New Deal set up the Federal Crop Insurance corporation, issuing government policies for damage to the big field crops. In a parallel universe there were several private companies (some associated with the Farm Bureau, etc.) issuing similar policies. In the 70's we had a standing program that made disaster payments. In 1980, Congress and the Administration decided to phase out the standing program in favor of the private companies, with Federal reinsurance. But each time Congress has said: "no more ad hoc
disaster programs, you have to have crop insurance, they've backed down. The result is a mish-mash of policies and programs that offends every rational bone in this bureaucrat's body. But the reality is the private insurance lobby packs too much clout to expect any big change in the future.

(A diversion--long ago, about a century ago as a matter of fact, the insurance industry (i.e., life, liability, etc.) dodged the bullet of federal regulation because they had too much clout. Insurance agents and adjusters are precisely the sort of people who can make for good political workers.