@article{goodwin_vado_2007, title={Public responses to agricultural disasters: Rethinking the role of government}, volume={55}, ISSN={["1744-7976"]}, DOI={10.1111/j.1744-7976.2007.00099.x}, abstractNote={ We provide a broad overview of the role and history of federal disaster relief in U.S. agriculture. We discuss various economic arguments that may be used as justification for such disaster relief and subsidized insurance programs. In general, we find no persuasive argument that market failure justifies subsidized risk management activities by the government. Important exceptions exist in the case of catastrophic damages to public infrastructure, invasive and communicable disease threats, and the hazards posed by accidental or deliberate contamination of food supplies in that the presence of significant transactions costs may inhibit private market solutions. We also consider a panel VAR analysis of the dynamic interrelationships among market returns and farm program payments conveyed under three different types of programs—disaster assistance, crop insurance, and all other direct payments. An important finding is that disaster and insurance payments appear to imply higher subsequent levels of market income risk in agriculture. This finding is consistent with arguments that subsidized disaster assistance and insurance may lead to greater risk in agriculture. }, number={4}, journal={CANADIAN JOURNAL OF AGRICULTURAL ECONOMICS-REVUE CANADIENNE D AGROECONOMIE}, author={Goodwin, Barry K. and Vado, Ligia A.}, year={2007}, month={Dec}, pages={399–417} }