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Crop Insurance: Participation in and Costs Associated With the Federal Program

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Report Type Reports and Testimonies
Report Date July 6, 1988
Report No. RCED-88-171BR
Subject
Summary:

In response to congressional requests, GAO reviewed the Federal Crop Insurance Corporation's (FCIC) crop insurance programs to determine: (1) the level of farmer participation in the programs; (2) why participation rates varied; and (3) insurance experts' reasons for the low participation rates and suggestions to increase the rates.

GAO reviewed crop insurance programs in 10 states, and found that: (1) participation rates among the states varied from 2.9 percent to 44.9 percent; (2) some crops had 60-percent participation, while others were not insured at all; (3) fluctuations in weather patterns, program promotion and education efforts influenced participation rates among both states and crops; (4) crop insurance experts cited crop diversification, the condition of the farm economy, and insurance agent problems as reasons for low participation rates; (5) crop insurance premiums and cash flow also varied considerably among states and crops; and (6) there were no comprehensive, nationwide studies to determine the reasons for low program participation.

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