ABSTRACT
This chapter examines four alternatives: disaster assistance, the crop insurance program, the Group Risk Plan, and revenue insurance. The budget deficit has forced Congress to consider new alternatives to deliver crop failure assistance. Alternatives that require farmers to share in risk protection have the potential to fit most performance criteria. Properly working insurance alternatives should improve the ability of efficient farmers to survive major shocks. Most alternatives considered so far represent variations of the mix of disaster assistance and Multiple Peril Crop Insurance (MPCI). The other justification for government intervention in MPCI is that subsidies are needed to get acceptable participation levels. Risk in agriculture has been identified as one justification for government intervention for well over half a century. In addition, lessons from the late 1970s and 1980s have shown that US agriculture is more vulnerable than many industries to changing macroeconomics policies.
