本科毕业论文外文翻译外文题目：The Political Economy of the US Crop Insurance Program 出处：The Economic Impact of Public Support to Agriculture(2010)7:243-308作者：Bruce A.Babcock原文The Political Economy of the US Crop Insurance Program Abstract：Taxpayer support for the crop insurance industry has grown rapidly since 2000 even though total crop acres insured is stagnant and the number of policies sold has declined. Staunch support for the program by key members of Congress meant defeat for proposals in the 2008 Farm Bill to significantly reduce cost. These proposals included large changes in the formulas used to calculate industry reimbursement and for new programs that would be integrated with or reduce the amount of risk insured by the crop insurance program. The reason for this resilience is program complexity and biased analysis, which has allowed the industry to claim that they are undercompensated despite a doubling of taxpayer support. One unforeseen outcome of the strength of the crop insurance industry in protecting its interests is that a new insurance program called Average Crop Revenue Selection (ACRE) was passed in the farm bill. Large unintended consequences that could be brought about by ACRE include the likely demise of the marketing loan and countercyclical programs, increased risk that the United States will violate its amber box limits, and in the not-too-distant future, a complete change in the way that US crop insurance is delivered to farmers.IntroductionThe difficulty with which Congress passed a US Farm Bill was hampered more by a need to find increased funds than with any broad philosophical debate about the proper direction for US farm policy. At first perusal, the new US commodity policy largely follows the policy set forth in the 2002 farm bill. Direct payments,countercyclical payments, and the marketing loan program still exist and are largely unchanged. Wheat and soybeans have a slightly higher target price and lentils have a slightly lower loan rate. To maintain this program structure largely in tact while boosting funding for nutrition programs required Congress to find new funds.Congress had no appetite for reducing direct payments, which left only the crop insurance program that could be tapped for savings. The debate over how much to take away from the crop insurance program provided many with their first detailed reason to understand a program that has grown tremendously since 2000. The stakes of those with vested interests in the program are now in the billions of dollars annually, which makes change more difficult than when the stakes were in the millions of dollars. Not surprisingly, those with a large vested interest in the crop insurance program came out largely unscathed in the 2008 farm bill. Although supporters of the program lament the large cuts that crop insurance took, the cuts really only took away a small portion of the gains that accrue to its beneficiaries.One unforeseen outcome of the strength of the crop insurance industry in protecting its interests is that the new insurance program that was passed in the farm bill will be operated completely by the Farm Service Agency (FSA) instead of by the Risk Management Agency (RMA). The new program, called ACRE (Average Crop Revenue Election), will not be integrated into the existing crop insurance program because such integration would have meant less risk being handled by the crop insurance industry.The remainder of this chapter provides a political/economic analysis of why the United States finds itself with two crop insurance programs and an exploration of the possibly large, unintended consequences of having both programs. The explanation for why we have both programs lies, not surprisingly, in Congress trying to find an outcome that would give a diverse set of interest groups what they want, while providing the necessary funds for expanded nutrition programs, which was a major objective of House leadership. The large unintended consequences that could be brought about by ACRE include the likely demise of the marketing loan and countercyclical programs, increased risk that the United States will violate its amber box limits, and in the not-too-distant future, a complete change in the way that UScrop insurance is delivered to farmers.Background on the US Crop Insurance ProgramThe US crop insurance program has two broad public policy objectives: help farmers manage financial risk and eliminate the need for Congress to pass supplemental ad hoc disaster assistance programs. To meet these twin objectives, Congress reformed the program in 2000 with the Agricultural Risk Protection Act (ARPA). The reform was justified by President Clinton in his statement upon signing the Agricultural Risk Protection Act (ARPA) of 2000: “I have heard many farmers say that the crop insurance program was simply not good value for them, providing too little coverage for too much money. My FY 2001 budget proposal and this bill directly address that problem by making higher insurance coverage more affordable, which should also mitigate the need for ad hoc crop loss disaster assistance such as we have seen for the last three years.” And in 2006 testimony before the House Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies, former USDA under secretary J.B. Penn said, “One of the overarching goals of the crop insurance program has been the reduction or elimination of ad hoc disaster assistance.”By all accounts, Congress has seemingly succeeded in its objective to help farmers manage risk. Coverage is provided to more than 350 commodities in all 50 states and Puerto Rico. And more than 80% of eligible acres are now insured under the program. However, this success has come at a high cost. Congressional Budget Office (CBO) projections made in 2007 indicate that the crop insurance program will cost taxpayers an average of more than $5 billion per year for the next 5 years, which is about double what the program would have cost without the reform. Actual expenditures will be much higher if crop prices stay high. One might be able to justify this additional cost if the second objective of the program had been met also. But passage of ACRE and a permanent disaster program in the new farm bill indicates that crop insurance provides inadequate coverage for farmers, as does inclusion of $3.5 billion in yet another disaster assistance program in the 2008 Iraq funding bill. Members of the House and Senate Agricultural Committees justify the need for disaster assistance despite large amounts of crop insurance aid because even an expanded crop insurance program cannot provide adequate assistance to farmers in financial stress. The large losses in Iowa from excess rainfall in 2008 will once again test Congress’ ability to count on the crop insurance program to deliver adequate aid to farmers.A Simple Model of Competition in Crop InsuranceThere are five main players in the crop insurance industry: Congress, government regulators, farmers, crop insurance agents, and crop insurance companies. Taxpayer subsidies created and provide continual support the industry. Congress reacts to political pressure by passing laws that regulate and subsidize the industry. Regulators implement those laws. Farmers buy crop insurance from a crop insurance agent. Crop insurance agents decide which crop insurance company will receive each farmer’s business. Agents make money by earning commission on each policy that they sell. The variable cost of selling policies is much less than the commission on most policies, so the more policies they sell, the more money agents make. Thus agents have an incentive to compete with other agents for a farmer’s business. Crop insurance companies make money from underwriting gains and from A&O reimbursements. The non commission variable costs are much less than A&O and expected underwriting gains in almost all states. Thus, the more policies that they can obtain, the more money they can make. This creates an incentive for companies to compete for agents’ books of business. Agents and companies and farmers have an incentive to lobby Congress to pass laws that work to their favor. Because taxpayer subsidies are the only source of revenue for companies or agents, any lobbying that they do uses taxpayer funds.There exist two sources of competition in this model. Agents compete for farmers business and companies compete for agents business. The agent competition for farmers’ business cannot include price competition beca use of laws passed by Congress at the behest of agents. So agents must compete in terms of service. The types of service that can be offered include educating farmers about the types of insurance coverage offered; lowering the farmer cost of filling out required forms; and keeping farmers informed of any information that may prove useful to farmers. All of these services are of second-order importance to farmers because either they are one-time benefits or because they do not directly increase farmers’ prof its. By default, a farmer’s business remains with an agent year after year. So unless an agent convinces a farmer to switch agents, no switch will take place. To a farmer, the benefit of switching must be greater than the cost of switching, which involves some paperwork, possibly alienating a local neighbor or business person, and search costsfor an agent that can provide superior service. Because there are positive switching costs and only indirect benefits, the incentive for most farmers to switch is not very high, although exact measurement of the incentive would be difficult. Consequently, the productivity of agent investments designed to induce farmers to switch will not be high. In equilibrium, each agent invests an optimal amount to keep his or her business and to perhaps attract new business, and each farmer has found the agent where the benefits of further switching are outweighed by the costs. Entry costs, although nominally seemingly low, are actually quite high because new entrants will find it difficult to build up their book of business by inducing an adequate number of farmers to switch. Thus each agent has essentially a captive book of business.Average Crop Revenue ElectionsACRE is an optional program that if chosen by a farmer would reduce a farmer’s direct payment by 20%, eliminate countercyclical payments, and dramatically reduce the farmer’s loan rate. In exchange, a farmer would receive a state revenue guarantee equal to 90% of the product of Olympic average of the previous 5 years of state yields and the average of the previous 2 years’ season average prices. If the product of actual state yield and season average price is less than this guarantee, then a farmer will receive the difference (up to 25% of the guarantee) on 85% of planted acres for all program crops. Farmers can choose ACRE beginning with the 2009 crop year. Once chosen, the choice cannot be revoked for the life of the farm bill.Because this new program looks back in time for the price that it uses to set the guarantee, the actual path of prices will determine how many farmers will find it profitable to choose ACRE. For the 2009 crop year, the price used to set the guarantee were the 2007/2008 and 2008/2009 marketing year prices.The key to farmer participation will be the 2009 expected season average price. If market prices stay substantially above the ACRE price, then farmers will not be receiving any marketing loan gains or countercyclical payments because the loan rates and target prices are so low relative to expected market price. But ACRE will also be providing an out-of-the-money guarantee so farmers may feel that the 20% cut in direct payments is too high a price to pay for potential ACRE payments. In this case, note that the 2010 ACRE price will be even higher than the 2009 price so farmerswould know that their 2010 ACRE guarantee would be even higher than the 2009 guarantee so that there is little downside of signing up in 2009.If many farmers participate in ACRE, then marketing loans and countercyclical payments will not play an important role in the next farm. But before we can conclude that all farmers will choose ACRE, we must consider the impact on the ACRE guarantee if market prices fall in 2009 and in subsequent years. It could be that the ACRE guarantee falls so low in 2011 and 2012 that it makes the current program more advantageous.However, a provision in the ACRE program does not allow the guarantee to increase or decrease more than 10% in any year. This means that the 2013 guarantee can only drop to 65.61% of the 2009 guarantee. Because the 5-year Olympic average of state yields will not typically increase or decrease a dramatic amount, it is reasonable to ask whether an ACRE price of 65.61% of the 2009 ACRE price makes marketing loan gains and countercyclical payments more attractive than ACRE.If the 2007 and 2008 WASDE estimates of marketing year prices are true so that the 2009 ACRE prices come in at $5.08 and $10.88 for corn and soybeans, then 65.61% of these prices are $3.33 and $7.14, respectively. This is the minimum ACRE price that could be reached in the 2008 farm bill period. At these ACRE prices, the net benefit to ACRE is still positive. Thus, it seems that ACRE dominates the current program for corn and soybean farmers. This suggests that if 2008 market prices are anywhere close to where WASDE projects them to be, then all farmers will have an incentive to choose ACRE.Future ImplicationsThe crop insurance lobby was successful at defeating area revenue insurance programs that would have replaced or been integrated with crop insurance. Instead we have the ACRE program that because it is backward looking has the potential for making dramatically higher payments than if a forward-looking program like Group Risk Income Protection had been adopted instead. Although its supporters claim that the program is more market oriented than programs with a fixed guaranteed price, this does not mean that it is less distortionary than current programs because of the potential for in-the-money revenue guarantees at planting time. These in-the moneyguarantees could imply difficulty in meeting WTO commitments if price levels continue higher for a year or two and then fall dramatically, perhaps because of a rethinking of US ethanol policy.It is likely that when the vast majority of farmers choose ACRE in the years ahead, they will find that state-level revenue guarantees are not the same as countyor farm-level guarantees. That is, very low state yields that trigger payments will likely be associated with farm-level losses, but there will be years in which farm level losses occur, but state losses do not. This will increase pressure in the next farm bill for farmers to push for a more disaggregate guarantee, perhaps at the county level. In addition, the backward-looking price-setting mechanism will be difficult to defend. Using futures prices is a much more transparent and market-oriented means of setting program guarantees. Finally, ACRE will likely lead to a wholesale reevaluation of the crop insurance program as the primary means of delivering risk management support to farmers. Farmers will find that risk management can be delivered from the farm program at much lower cost by simply taking the systemic risk out of the crop insurance program and covering this risk in the farm bill. This has the potential for being a much more cost-effective approach than the current approach of insuring both pool able and systemic risk in the farm bill.译文美国农作物保险计划的政治经济学摘要：文章分析了美国农业保险的背景，然后从纳税人支持农作物保险服务，行政和操作补贴，净承销的收益，保费补贴四个方面对美国农业保险的现状作了阐述，然后建立了一个模型，最后对农业保险在美国发展的前景进行了描述，认为农业保险讲在美国取得全国性的成功。
