David has given me permission to share his views before, I'm hoping that still stands. I post this to give everyone help in defending a program, crop insurance, that works well. Without it a lot of farmers would be gone or, ad hoc disaster programs would still be the order of the day.

From the Feb.12,2012 Commstock Report

Not too many economists at Iowa State University work for the "dark side" as does Bruce Babcock who produced a study for the Environmental Working Group that hates "us". The EWG and Babcock do not like crop insurance subsidies or the generosity of the current crop insurance program. He claims that farmers have been paid $2.20 for every dollar that they have invested in crop insurance from 2000-2014. They suggest that is a bad thing. I don't see it that way. The bulk of those indemnities came with the major drought at the end of his study period so yes, large indemnities were paid but that was far cheaper than farm aid disaster programs after previous historical losses. Crop insurance replaced disaster programs far more effectively and efficiently.

Taxpayers do subsidize crop insurance premiums but indemnities are only paid when there are losses. Direct farm subsidy payments not tied to losses were ended. I have not received the study but as farmers only pay for a portion of the premium, sometimes just 40%, so that would mean that losses did not exceed premiums paid, just the portion paid by the farmer. Losses suffered by farmers have not been made whole by crop insurance because of varying coverage levels of 70%-85%. Farmers are not making money because of crop insurance or off taxpayer subsidies for crop insurance. Levels of coverage to cover cost of production for farmers are not available. Is Crop insurance a good deal for farmers? You bet. Yet I paid $thousands in premium last year and didn't collect a dime. It is not like gee . . . invest $1000 and get back $2200. You do have to have a loss. And to recover a loss from crop insurance, you have suffered a larger loss that is not compensated for by crop insurance. If his study period had been from 2000-2010 I expect that the return to farmers would have been less or even negative when the drought years were excluded from the study but that would not have produced the headline that the EWG wanted and paid Babcock for.