SABIIA - Sistema Aberto e Integrado de Informação em Agricultura (Sabiia)

Xu, Wei; Filler, Gunther; Odening, Martin; Okhrin, Ostap.

Systemic weather risk is a major obstacle for the formation of private (nonsubsidized) crop insurance. This paper explores the possibility of spatial diversification of insurance by estimating the joint occurrence of unfavorable weather conditions in different locations. For that purpose copula methods are employed that allow an adequate description of stochastic dependencies between multivariate random variables. The estimation procedure is applied to weather data in Germany. Our results indicate that indemnity payments based on temperature as well as on cumulative rainfall show strong stochastic dependence even at a national scale. Thus the possibility to reduce risk exposure by increasing the trading area of the insurance is limited. Irrespective of...

PRODUCTION RISK AND CROP INSURANCE IN MALTING BARLEY: A STOCHASTIC DOMINANCE ANALYSIS

Palavras-chave: Weather risk; Crop insurance; Copula; Risk and Uncertainty; C14; Q19.

Ano: 2009

URL: http://purl.umn.edu/49131

Wilson, William W.; Gustafson, Cole R.; Dahl, Bruce L..

Malt barley is an important specialty crop in the Northern Plains and growers mitigate risk with federally subsidized crop insurance and production contracts. However, growers face considerable risk due to "coverage gaps" in crop insurance that result in uncertain indemnity payments due to uncertainty of their crop meeting contract specifications. A stochastic dominance model is developed to evaluate alternative risk efficient strategies for growers with differing risk attitudes and production practices (irrigation vs. dryland). Results show that efficient choices are highly dependent on risk attitudes for dryland growers, but not irrigated growers. Sensitivities with respect to acceptance risk and level of crop insurance subsidization are presented....

An Internet-Based Tool for Weather Risk Management

Palavras-chave: Crop insurance; Malting barley; Stochastic dominance; Stochastic efficiency; Crop Production/Industries; Risk and Uncertainty.

Ano: 2006

URL: http://purl.umn.edu/23561

Turvey, Calum G.; Norton, Michael T..

This paper introduces a web-based computer program designed to evaluate weather risk man-agement and weather insurance in the United States. The paper outlines the economics of weather risk in terms of agricultural production and household well-being; defines weather risk in terms of intensity, duration, and frequency; and illustrates the computer program use by comparing heat and precipitation risks at Ardmore, Oklahoma, and Ithaca, New York.

Tipo: Journal Article

Palavras-chave: Weather insurance; Heat insurance; Precipitation insurance; Crop insurance; Weather derivatives; Risk and Uncertainty.

Ano: 2008

URL: http://purl.umn.edu/44739

EVALUATION OF CROP INSURANCE PREMIUM RATES FOR GEORGIA AND SOUTH CAROLINA PEACHES

Miller, Stephen E.; Kahl, Kandice H.; Rathwell, P. James.

We estimate actuarially fair premium rates for yield insurance for Georgia and South Carolina peaches for comparison to the premium rates established by the Risk Management Agency (RMA) for the 1999 crop. The RMA premium rates varied from county to county, but were identical for all growers in a given county. The estimated premium rates decrease with the grower's expected yield. The RMA rate structure encouraged adverse selection, as premium rates were too low for growers with low expected yields (especially at low coverage levels) and were too high for growers with high expected yields (especially at high coverage levels).

Tipo: Journal Article

Palavras-chave: Adverse selection; Crop insurance; Peaches; Premium rate; Yield guarantee; Risk and Uncertainty.

Ano: 2000

URL: http://purl.umn.edu/14711

Using participating and financial contracts to insure catastrophe risk: Implications for crop risk management

Enjolras, Geoffroy; Kast, Robert.

High losses generated by natural catastrophes reduce the availability of insurance. Among the ways to manage risk, the subscriptions of participating and non-participating contracts respectively permit to implement the two major principles in risk allocation: the mutuality and the transfer principles. Decomposing a global risk into its idiosyncratic and systemic components, we show that: the participating contract hedges the individual losses under a variable premium and the systemic risk is covered with a non-participating contract under a fixed premium. Based on Doherty and Schlesinger (2002) and Mahul (2002) approaches, our model replaces the non-participating contract by a financial one based on an index closely correlated to the systemic risk, under a...

Managing Risk in Farming: Concepts, Research, and Analysis

Palavras-chave: Catastrophe risk; Crop insurance; Optimal hedging; Securitization; Crop Production/Industries; Risk and Uncertainty.

Ano: 2007

URL: http://purl.umn.edu/9268

Harwood, Joy L.; Heifner, Richard G.; Coble, Keith H.; Perry, Janet E.; Somwaru, Agapi.

The risks confronted by grain and cotton farmers are of particular interest, given the changing role of the Government after passage of the 1996 Farm Act. With the shift toward less government intervention in the post-1996 Farm Act environment, a more sophisticated understanding of risk and risk management is important to help producers make better decisions in risky situations and to assist policymakers in assessing the effectiveness of different types of risk protection tools. In response, this report provides a rigorous, yet accessible, description of risk and risk management tools and strategies at the farm level. It also provides never-before-published data on farmers' assessments of the risks they face, their use of alternative risk management...

Tipo: Report

Palavras-chave: Crop insurance; Diversification; Futures contracts; Leasing; Leveraging; Liquidity; Livestock insurance; Marketing contracts; Options contracts; Production contracts; Revenue insurance; Risk; Vertical integration; Farm Management; Risk and Uncertainty.

Ano: 1999

URL: http://purl.umn.edu/34081

The Effects of Transitional Yields on Adverse Selection in Crop Insurance

Walters, Cory G.; Shumway, C. Richard; Chouinard, Hayley H.; Wandschneider, Philip R..

Transitional yields based on county average can be used by producers as the basis to obtain crop insurance on fields that have not previously produced the crop. Using field-level crop insurance contract data for several crops in five different growing regions we examine the impact of this asymmetric information on adverse selection. Our results indicate that adverse selection does exist from the use of transitional yields and that it is crop specific but not land-quality specific.

Get a GRIP: Should Area Revenue Coverage Be Offered through the Farm Bill or as a Crop Insurance Program?

Palavras-chave: Adverse selection; Crop insurance; Transitional yields; Risk and Uncertainty; Q18.

Ano: 2007

URL: http://purl.umn.edu/9849

Paulson, Nicholas D.; Babcock, Bruce A..

The successful expansion of the U.S. crop insurance program has not eliminated ad hoc disaster assistance. An alternative currently being explored by members of Congress and others in preparation of the 2007 farm bill is to simply remove the "ad hoc" part of disaster assistance programs by creating a standing program that would automatically funnel aid to hard-hit regions and crops. One form such a program could take can be found in the area yield and area revenue insurance programs currently offered by the U.S. crop insurance program. The Group Risk Plan (GRP) and Group Risk Income Protection (GRIP) programs automatically trigger payments when county yields or revenues, respectively, fall below a producer-elected coverage level. The per-acre taxpayer...

Late Planting Decisions with Crop Insurance: Decision Guidelines for Michigan Farmers in Spring 2011

Palavras-chave: Area revenue insurance; Commodity programs; Crop insurance; Group Risk Income Protection; Agricultural and Food Policy; Risk and Uncertainty.

Ano: 2007

URL: http://purl.umn.edu/18333

Betz, Roger; Schweikhardt, David B.; Black, J. Roy; Hilker, James H..

Michigan has had unusually wet planting conditions in 2011, leading to substantial acreage that has not been planted at this late date. Farmers who purchased crop insurance have many options available to them. This paper addresses the major crop insurance decisions that farmers will face during the next 30 days.

POTENCIALIDADE DO SEGURO RURAL NO BRASIL

Palavras-chave: Crop insurance; Prevented planting; Risk management; Farm management; Corn returns; Soybean returns; Agricultural and Food Policy; Crop Production/Industries; Farm Management; Risk and Uncertainty.

Ano: 2011

URL: http://purl.umn.edu/108905

Jardim, Ana Lucia Carvalho; Ferreira, Leo da Rocha.

O objetivo desta comunicação é relatar o andamento de uma pesquisa que visa avaliar a eficiência econômica de programas de seguro rural no contexto brasileiro, usando como base o atual projeto do governo de criação do Fundo de Catástrofe. A potencialidade do seguro rural no Brasil é discutida e avaliada tendo como pano de fundo a atual política agrícola brasileira, fundamentada principalmente no incentivo ao crédito rural. A intenção é verificar a eficiência dos gastos do governo com as políticas voltadas ao setor agropecuário. Neste sentido, são apresentadas e discutidas as experiências internacionais que se utilizam o seguro rural ao produtor, em detrimento dos subsídios diretos ao crédito. O artigo conclui que o Fundo de Catástrofe poderá permitir não...

FARM RISK POLICY AT A CROSSROAD

Palavras-chave: Seguro rural; Política agrícola; Fundo de catástrofe; Crop insurance; Agricultural policy; Catastrophic fund; Agricultural and Food Policy; Risk and Uncertainty.

Ano: 2008

URL: http://purl.umn.edu/109766

A Two Stage Model of the Demand For Specialty Crop Insurance

Coble, Keith H..

Legislatively mandated declines in government program payments have coincided with sharp declines in most major crop commodity prices. Thus, a debate has begun about the direction of future farm policy. The debate has been largely expressed in terms of a "safety net" for producers. This paper address several economic issues associated with proposals to enhance the agricultural "safety net." The case is made that crop insurance reform cannot satisfy the desire for above-market price supports. Characteristics required for an insurable risk are discussed, as are the interactions between public and private risk-management tools.

Tipo: Journal Article

Palavras-chave: Agricultural policy; Crop insurance; Risk; Agricultural and Food Policy; Risk and Uncertainty.

Ano: 2000

URL: http://purl.umn.edu/14704

Richards, Timothy J..

Proposals for reform of the federal multiple-peril crop insurance program for specialty crops seek to change fees for catastrophic (CAT) insurance from a nominal fifty-dollar per contract registration fee to an actuarially sound premium. Growers argue that this would cause a significant reduction in participation rates, thus impeding the program's goals of eventually obviating the need for ad hoc disaster payments and worsening the actuarial soundness of the program. The key policy issue is, therefore, empirical one - whether the demand for specialty crop insurance is elastic or inelastic. Previous studies of this issue using either grower or county-level field crop data typically treat the participation problem as either a discrete insure / don't insure...

Nutrient Best Management Practice Insurance and Farmer Perceptions of Adoption Risk

Palavras-chave: California; Crop insurance; Discrete/continuous choice; Grapes; Multinomial logit.; Risk and Uncertainty.

Ano: 1998

URL: http://purl.umn.edu/28546

Testing Day’s Conjecture that More Nitrogen Decreases Crop Yield Skewness

Mitchell, Paul D..

This paper explores the effect farmer perceptions concerning how best management practice (BMP) adoption changes the profit distribution have on BMP adoption incentives and the potential for insurance to increase these incentives. Adoption indifference curves illustrate the effect of farmer perceptions on BMP adoption incentives and the potential for insurance to expand the set of perceptions consistent with adoption. Empirical analysis quantifies these conceptual results for nutrient BMP insurance, a new policy available to corn farmers as part of a USDA-Risk Management Agency pilot program in four states. Results indicate that nutrient BMP insurance can have economically relevant effects on farmer adoption incentives.

Tipo: Journal Article

Palavras-chave: Adoption indifference curves; Crop insurance; Fertilizer; Green insurance; D8; Q12; Q16; Q21.

Ano: 2004

URL: http://purl.umn.edu/43460

Du, Xiaodong; Hennessy, David A.; Yu, Cindy L..

While controversy surrounds skewness attributes of typical yield distributions, a better understanding is important for agricultural policy assessment and for crop insurance rate setting. Day (1965) conjectured that crop yield skewness declines with an increase in low levels of nitrogen use, but higher levels have no effect. In a theoretical model based on the law of the minimum (von Liebig) technology, we find conditions under which Day’s conjecture applies. Employing four experimental plot datasets, we investigate the conjecture by introducing (a) a flexible Bayesian extension of the Just-Pope technology to incorporate skewness, and (b) a quantile-based measure of skewness shift. For corn yields, the Bayesian estimation provides strong evidence in favor...

Impact of the New Standard Reinsurance Agreement (SRA) on Multi-Peril Crop Insurance (MPCI) Gain and Loss Probabilities

Palavras-chave: Crop insurance; Gibbs sampler; Just and Pope technology; Negative skewness; Quantile regression.; Crop Production/Industries; Political Economy; Research Methods/ Statistical Methods; Risk and Uncertainty.

Ano: 2010

URL: http://purl.umn.edu/93471

Vergara, Oscar; Seaquist, Jack; Zuba, Gerhard; Harrigan, Matthew; Lee, Eric.

We utilize an agricultural model that uses crop/weather relationships at the county resolution and fits robust distributions that take into account the impact that weather has on crop production. Once the crop insurance policy conditions and prices are applied to the modeled county yield distributions, the portfolio gain and losses can be calculated by aggregating the gain and losses at the county level, state level, regional level and nationwide level. Portfolio losses are computed under the old and new SRA rules and regulations for comparison purposes.

ECONOMIC IMPACT OF SCAB WITH ALTERNATIVE RISK MANAGEMENT STRATEGY: THE CASE OF CROP QUALITY INSURANCE IN BARLEY

Palavras-chave: SRA; MPCI; Crop insurance; Stochastic model; Weather peril; Probabilities; Crop Production/Industries; Research and Development/Tech Change/Emerging Technologies; Risk and Uncertainty; C; Q.

Ano: 2011

URL: http://purl.umn.edu/103282

Nganje, William E.; Tiapo, Napoleon M.; Wilson, William W..

Managing quality risks, especially grain quality, has been a challenge facing farmers, grain merchandisers, and policymakers for many years. With the advent of genetically modified organisms (GMOs), food safety, and identity preservation, this is even more challenging today. In this paper, an equilibrium crop insurance model was developed and used to analyze the impact of quality risks on equilibrium coverage levels and risk premiums that suppliers of insurance and barley producers would be willing to provide when yield and revenue insurance instruments explicitly incorporate quality risks. The asking price concept and sensitivity analysis were used to evaluate farmers' behavior after they purchase crop quality insurance and to provide guidance and...

Mitigating Cotton Revenue Risk Through Irrigation, Insurance, and Hedging

Palavras-chave: Crop insurance; Equilibrium coverage levels; Fusarium Head Blight; Premium rates; Quality risks; Risk aversion; Crop Production/Industries.

Ano: 2002

URL: http://purl.umn.edu/23641

Barham, E. Hart Bise; Robinson, John R.C.; Richardson, James W.; Rister, M. Edward.

This study focuses on managing cotton production and marketing risks using combinations of irrigation levels, put options (as price insurance), and crop insurance. Stochastic cotton yields and prices are used to simulate a whole-farm financial statement for a 1,000 acre furrow irrigated cotton farm in the Texas Lower Rio Grande Valley under 16 combinations of risk management strategies. Analyses for risk-averse decision makers indicate that multiple irrigations are preferred. The benefits to purchasing put options increase with yields, as they are more beneficial when higher yields are expected from applying more irrigation applications. Crop insurance is strongly preferred at lower irrigation levels.

Tipo: Journal Article

Palavras-chave: Cotton; Crop insurance; Irrigation; Options; Puts; Risk; Simulation; Stochastic efficiency with respect to a function; Farm Management; Risk and Uncertainty; D81; Q12; Q15.

Ano: 2011

URL: http://purl.umn.edu/117946

Farm-Level Analysis of Risk Management Proposals

Babcock, Bruce A.; Hart, Chad E.; Adams, Gary M.; Westhoff, Patrick C..

This paper presents a detailed report of the representative farm analysis (summarized in FAPRI Policy Working Paper #01-00). At the request of several members of the Committee on Agriculture, Nutrition, and Forestry of the U.S. Senate, we have continued to analyze the impacts of the Farmers' Risk Management Act of 1999 (S. 1666) and the Risk Management for the 21st Century Act (S. 1580). Earlier analysis reported in FAPRI Policy Working Paper #04-99 concentrated on the aggregate net farm income and government outlay impacts. The representative farm analysis is conducted for several types of farms, including both irrigated and non-irrigated cotton farms in Tom Green County, Texas; dryland wheat farms in Morton County, North Dakota and Sumner County, Kansas;...

Análise espacial da produtividade agrícola no Estado do Paraná: implicações para o seguro agrícola

Palavras-chave: Crop insurance; Farm analysis; Representative farm analysis; Revenue; Risk and Uncertainty.

Ano: 2000

URL: http://purl.umn.edu/18389