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Economic Evaluation of Bt Corn Refuge Insurance AgEcon
Mitchell, Paul D.; Hurley, Terrance M.; Hellmich, Richard L..
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...
Tipo: Working or Discussion Paper Palavras-chave: Bt corn; Crop insurance; Refuge crops; Pest-resistant management; European corn borer; Yield loss; Crop Production/Industries; Risk and Uncertainty.
Ano: 2000 URL: http://purl.umn.edu/18565
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