Data/hora: 04/06/2024 18:10:02

Provedor de dados: | 31
País: | United States
Título: | ARPA Subsidies, Unit Choice, and Reform of the U.S. Crop Insurance Program
Autores: | Babcock,   Bruce A.; Hart,   Chad E.
Data: | 2005-02-09
Ano: | 2005
Palavras-chave: | Agricultural Risk Protection Act (ARPA); Crop insurance; Optional units; Crop Production/Industries; Risk and Uncertainty.
Resumo: | The Agricultural Risk Protection Act (ARPA) has largely met its objectives of inducing farmers to increase their use of the crop insurance program. Both insured acreage and coverage levels have increased dramatically in response to ARPA's large increase in premium subsidies. An unintended consequence of the larger subsidies is a dramatic increase in the incentive for farmers to insure their crops under optional units, that is, insurance at the field level rather than at the farm or crop level. The expected rate of return to farmers who choose to invest additional premium dollars to move to optional unit coverage ranges from a low of 61 percent at the 85 percent coverage level to 144 percent at the 65 percent coverage level. This explains why the majority of farmers choose optional unit coverage even though the alternative unit structures provide identical insurance guarantees at a substantially lower cost. We consider two policy options to eliminate the unintended consequences of ARPA subsidies.
Tipo: | Working or Discussion Paper
Idioma: | Inglês

Identificador:

15853

http://purl.umn.edu/18297

Editor: | AgEcon Search

Relação:

Iowa State University&gt;Center for Agricultural and Rural Development&gt;CARD Briefing Paper Series

CARD Briefing Paper 05-BP 45

Formato:

23

application/pdf