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Provedor de dados:  AgEcon
País:  United States
Título:  Economic Evaluation of Bt Corn Refuge Insurance
Autores:  Mitchell, Paul D.
Hurley, Terrance M.
Hellmich, Richard L.
Data:  2006-07-13
Ano:  2000
Palavras-chave:  Bt corn
Crop insurance
Refuge crops
Pest-resistant management
European corn borer
Yield loss
Crop Production/Industries
Risk and Uncertainty
Resumo:  The EPA has imposed mandatory refuge requirements for Bt crops to prolong the efficacy of Bt. Growers have no economic incentive to plant the required refuge because refuge crops are on average less productive and more risky. This paper evaluates refuge insurance—insurance thatpays indemnities for yield losses on refuge due to insect damage—as a tool to increase grower compliance incentives. We determine actuarially fair insurance premiums, then evaluate the feasibility of private provision of refuge insurance and its impact on grower incentives to comply with refuge requirements. A private market for refuge insurance appears unlikely because our analysis suggests that even a 2 percent load on the actuarially fair premium makes growers unwilling to buy refuge insurance. This load is not sufficient to cover administrative costs and provide a normal economic return. Even actuarially fair refuge insurance increases grower compliance incentives less than 3 percent. This result occurs because the primary benefit of Bt corn is yield enhancement and not risk reduction, but refuge insurance only reduces risk. For refuge insurance to provide significant compliance incentives, conventional insurance products must be restructured to draw premiums from sources other than grower risk premiums.
Tipo:  Working or Discussion Paper
Idioma:  Inglês
Identificador:  23038
Editor:  AgEcon Search
Relação:  Iowa State University>Center for Agricultural and Rural Development>CARD Working Paper Series
CARD Working Paper 00-WP 243
Formato:  26


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