Effects on Producers of the Transition to Revenue-Based Federal Crop Insurance Programs

Prior to the passage of each farm bill, there is much debate regarding the programs contained within it. One of these programs is federal crop insurance, which underwent a major shift in the mid-1990’s with the introduction of revenue-based crop insurance rather than yield-based. Revenue-based programs provide insurance of a certain revenue level, rather than a certain yield level, which contributed to their popularity among producers. These revenue-based programs have become a key component of federal crop insurance. From 2014 to 2018, the costs of federal crop insurance were approximately $41 billion, much of this a result of subsidized insurance premiums. Thus, there is much debate as to the benefits to producers justifying the costs. To research the benefits producers receive from these programs, a literature review was conducted drawing from various sources in order to summarize research as to the efficacy of these programs