An Analysis of the Proposed 4% Farmer-Premium Payment Cap

Welcome to 5-Minute Farmdoc, your go-to channel for insightful discussions on various topics related to agriculture. In today’s episode, we delve into the world of crop insurance and explore a recent proposal discussed by our colleagues from North Dakota. They suggest a change to the subsidy mechanism that assists farmers in covering the costs of crop insurance policies. This proposal aims to cap the farmer’s premium costs at 4% of the policy’s liability, altering the way we subsidize crop insurance. Join us as we navigate through the intricacies of this proposal, examining its potential impacts and policy considerations.

Schnitkey, G., B. Sherrick, N. Paulson, C. Zulauf, J. Coppess and J. Baltz. “Premium Support and Crop Insurance: An Analysis of the Proposed 4% Farmer-Premium Payment Cap.” farmdoc daily (13):117, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, June 27, 2023.

Bullock, D. and S. Steinbach. “Economic Consequences of Capping Premiums in Crop Insurance.” farmdoc daily (13):102, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, June 5, 2023.