Besides assuming most of the risk for losses, the government subsidizes the premiums farmers pay for the insurance and pays the companies a fee for handling the policies. The insurance companies have to pay some of the losses, with their share varying according to their government contracts. Acreage covered by the insurance has doubled to about 70 percent of all farmland since the program was last overhauled in 1994, while losses have been relatively low. USDA's Risk Management Agency, which oversees the program, has been shifting more of the risk to the companies in recent years and cutting their fees, officials say. In the case of the durum policies, USDA sharply reduced the potential benefits and is now being sued by farmers to have them reinstated.
Farmers are honest folks.
Farmers don't like to see people stealing taxpayer's money. Those policies cover losses from drought, floods, pests, and in some cases, drops in projected revenue. The government pays the rest of the premium. Farmers complain that crop insurance is usually too stingy and they want coverage for more specialty crops and also for livestock, which can't be insured now. E.W. Scripps Publications , All Rights Reserved.