What is the best way to protect vulnerable rural communities from the damaging impacts of climate change? Insurance could be an answer, but it raises a number of difficult questions.
To illustrate, the New York Times recently ran a story, “Report Says a Crop Subsidy Cap Could Save Millions.” The piece discusses a new U.S. Government Accountability Office (GAO) report that investigated the costs and distributive effects of the federal insurance program that protects farmers against crop failure and low market prices. This is a costly program for the federal government – farmers pay only 38 percent of the premiums, and the rest is covered by federal subsidies. Payouts are skewed toward the largest farms, which may receive very large payments because there is no subsidy cap. The cost to U.S. taxpayers in 2011 was $7.3 billion.