Oh, the cascading effect of subsidies.
The Wall Street Journal is reporting that the new crops insurance program embedded in the farm bill monstrosity will benefit scores of foreign companies that issue crop insurance.
Such an expansion would benefit numerous U.S. insurance companies—as well as several based in Australia, Bermuda and Switzerland that in recent years acquired five of the nine largest U.S. crop-insurance companies.
The business is profitable largely because the U.S. government covers up to 70% of the crop-insurance premiums, pays insurers more than $1 billion a year to cover overhead and administrative costs, and picks up the tab on some claims. The payments to insurers are needed to ensure they don’t drop out if risks or price volatility increase too much, companies say.
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