Rent seeking or lack of private insurance markets?

Dec 27th, 2007 | By Lene Johansen | Category: Blog

Monsanto has talked the federal government into giving farmers a break on their crop insurance if they use crops that produce pesticides. If other companies are involved in this too, it is a good thing, it is reasonable that lower risk crops should have a lower premium. It is not reasonable that only Monsanto’s pesticide producing crops should be considered lower risk.

The greens are crying foul though, they claim this is rent seeking and corruption, government should not “endorse a product” they argue.

I would have to agree, but they have defined the problem wrong. The government should not be involved in crop insurance in the first place. If this was a private market, the risk assessment would not be considered a political move on the part of USDA.

2 comments
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  1. Miranda December 27th, 2007 9:24 pm

    Ask me how much my father paid in crop insurance this year. Then ask me how much the government subsidized that cost. Lastly, ask me what percent the insurance agent keeps off the top of the insurance premium.

  2. Lene December 28th, 2007 9:26 am

    OK, how much?