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Seymour, IL | Tim
I am pretty sure crop insurance is insurance...nothing is paid out without a loss....be it based on yield or revenue.
I do not know why different crops have different rates of subsidy participation. From what I have read, the participation ranges from 38% to 80% of the total, and averages 40% across all crops. And I am not an actuary to be able to discuss why rates themselves change in a given year, although I know commodity price and volatility in trading have an influence. I am sure risk and weather variability enters into the equation also.
I am not sure how you calculated the $2 payout to $1 in premium, but the loss ratio for all crops across all locations for the time period from 1995 to 2012 was .95; or 95 cents paid out for each dollar taken in. Data and tables found at http://farmdocdaily.illinois.edu/2013/05/crop-insurance-losses-pers...
I am not saying that raising rise and corn are the same. they are both starches and commodity staples; but that may be about the end of their similarities.
bryon
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New Farmbill thoughts have prompted me to ask this question. Who has been writing your checks?
