Race and premium misrating in the U.S. Federal Crop Insurance Program

Abstract

USDA farm support programs have an established history of racial discrimination. Today, the Federal Crop Insurance Program is among the largest and most important programs available to U.S. farmers. Previous research has documented systematic misrating of crop insurance premiums with sizable welfare implications. In this paper, we explore whether producer race measured at the county level has explanatory power in a model of crop insurance misrating. We find that in some cases it does, raising concerns about the possibilities of racially discriminatory impacts of the RMA's rate‐setting methodology. Further research is needed to isolate the mechanisms that explain our findings.

An analysis of tax benefits by race and ethnicity for farm households

“…The benefits of these business tax benefits are largely limited to farm households with positive income and have been linked to increased business survival and growth (Bruce et al, 2014;Teal & Stevens, 2023;Williamson & Stutzman, 2016). Because of this, there may be implications for these business tax benefits that largely accrue to White and Asian farm households and differential effects on farm growth may be explored in future research.…”

“…There have been studies investigating differences across race in the distribution of government programs like crop insurance (Teal & Stevens, 2023), Market Facilitation Program and Coronavirus Food Assistance Program (Giri et al, 2022), Paycheck Protection Program Sant'Anna et al, 2023), and Farm Service Agency loans (Escalante et al, 2018;Ghimire et al, 2020;Mishra et al, 2023;Wu et al, 2012). To our knowledge this is the first paper to examine the distribution of tax benefits to farm households by race and ethnicity.…”