A new analysis says federal crop insurance not only allowed corn and soybean farmers to survive last summer's drought, it also allowed them to make higher profits than in a normal year -- at taxpayer expense.
"Say the words 'crop insurance' and most people start to yawn. For years, few nonfarmers knew much about these government-subsidized insurance policies, and even fewer found any fault with them. After all, who could criticize a safety net for farmers that saves them from getting wiped out by floods or drought?
But consider this: According to a new analysis, crop insurance allowed corn and soybean farmers not only to survive last year's epic drought, but it also allowed them to make bigger profits than they would have in a normal year. A big chunk of those profits were provided through taxpayer subsidies. In fact, crop insurance has grown into the largest subsidy that the government provides to America's farmers.
Economist Bruce Babcock from Iowa State University carried out the new analysis. It was commissioned by the Environmental Working Group, a long-time critic of agricultural subsidies."