Problems with market insurance in agriculture

A number of explanations are often given to justify government involvement in the U.S. crop insurance program. Basically, it is some form of market failure, whereby private markets are not able to function to supply crop insurance in an efficient manner. Of course, it is impossible to fully evaluate the viability of private insurance products in light of the fact that government involvement has characterized crop insurance over most of its history and undoubtedly will continue to do so for the forseeable future. One may ask - does government insurance exist because private insurance markets have failed or, conversely, is the lack of private markets a result of crowding out by government involvement?. The following sections of this arcticle review the fundamental explanations for government involvement in crop insurance.