Crop Insurance in the European Union: Lessons and Caution from the United States

Ramsey, Austin Ford and Santeramo, Fabio Gaetano (2017): Crop Insurance in the European Union: Lessons and Caution from the United States. Forthcoming in: EuroChoices

Abstract

Recent changes in the Common Agricultural Policy have focused attention on the possibility of an enlarged crop insurance program in Europe. Several countries in the European Union already have national crop insurance schemes, but the performance of these programs in terms of realized demand has been low. In some cases, participation in the programs remains low in spite of significant subsidies to insurance premiums. This situation can be contrasted with the federal crop insurance program in the United States, which is now the principal instrument of American agricultural policy and insured over 366 million acres in 2015. We focus on two questions: are there any justifications for subsidized crop insurance and how could such a scheme possibly be implemented in the EU? Quantitative and qualitative comparisons of the current state of crop insurance in the EU and US serve to motivate our observations.

• Item Type: MPRA Paper
• Language: English
• Keywords: Crop Insurance, EU, USA, Insurance scheme
• Subjects: D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty; G - Financial Economics > G2 - Financial Institutions and Services > G22 - Insurance ; Insurance Companies ; Actuarial Studies; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q18 - Agricultural Policy ; Food Policy

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