The question is not "why can't the farmers buy their own insurance?"  The real question to ask is:  "Will farmers buy their own crop insurance without the subsidy?" 

The answer to the first question is:  "Sure, they can.  But will they?"

The answer to the second question is:  "I'm not sure they will."  Maybe today they will, but in years past, it may have not been likely.  

My understanding - and I could be wrong on this - but my understanding is that only about 50% of the eligible crops in PA are covered by crop insurance.  Why?  Because farmers feel it is not worth the expense.  It is not that PA is so good at avoiding bad/ droughty years.  But rather, if there is a droughty year, PA farmers are more likely to run that crop thru an animal, and get some value out of it. 

In the years before Crop Insurance, when there was a bad year,  someone - farmers or people claiming to represent farmers - would go cry to their representatives in Washington, D.C., proclaiming how bad things are, claiming hardship, and requesting a diaster bailout.  And the politicians in D.C.  - wanting to keep the farm vote happy - would approve a diaster payment package for farmers.  Now, realize, maybe only 10% of the farmers wanted the bailout package, and maybe only 10 or 20% of the farmers needed the bailout to stay afloat, but if the bailout was available, the majority of farmers would take it.  After all...... "I pay my taxes, so I am entitled."     Now, think about the Dept of Ag, and their budget.  They have a budget in place, without a bailout package.  All the sudden we have a drought, and Congress approves a bailout.  What does that do to the budget process?  

After a while, someone in Congress wised up and realized this is not working.  So, they decided to subsidize crop insurance to encourage farmers to "buy in".  Sure, it would be nice if Congress/ US government did not need to subsidize it; however, this way Congress has a known amount in their budget for crop insurance subsidy, instead of some unknown figure that will blow their budget planning out of the water.  By subsidizing crop insurance, Congressional reps can say to the farming community:  " you have crop insurance available.  Use it!"

I see the process of subsidizing crop insurance as the lesser of two evils.   If it encourages more farmers to participate, to help fund their own risk management program, then I am all for it.  That's my take on it.