Crop Insurance & Moral Hazard

Increasingly, traditional farm safety net programs are being recognized as perpetuating the degeneration of natural capital by modern agriculture.

According to Investopedia, moral hazard is the idea that insurance promotes risk-taking for personal gain. In agriculture, crop insurance contributes to the choice of landowners to continue monocropping, tillage, and heavy crop input applications… despite their negative externalities on soil health, the surrounding environment, and long-term farm econom…