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| We need food for 320 million people in this country and another some tens of millions around the world. In order to make sure there is enough in the one bad year the government needs to overproduce in the other ten good years. If producers didn't have insurance they'd either have to charge enough to cover their risk of failure or cut production. (And even if they didn't charge the farm failures would naturally drive up the cost and lower production). If they charge enough to cover their real risks then the price of food for the other 99% goes up. If they cut production then the price of food goes up.
From the government's prospective, spending $7-8 billion per year on crop insurance to get the overproduction and lower food prices plus the food security is cheap.
Besides, why shouldn't the consumers (aka the taxpayers) share the cost of offsetting the risk of too little food. Why should the producers carry all the risk? Shouldn't the wider society pay for some of that risk mitigation? | |
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New Farm Bill
