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

Hart, Chad E.; Hayes, Dermot J.; Babcock, Bruce A..

The vast majority of crop and revenue insurance policies sold in the United States are single-crop policies that insure against low yields or low revenues for each crop grown on a particular farm. This practice of insuring one crop at a time runs counter to the traditional risk management practice of diversifying across several enterprises to avoid putting all of ones eggs in a single basket. This paper examines the construction of whole-farm crop revenue insurance programs to include livestock. The whole-farm insurance product covers crop revenues from corn and soybeans and livestock revenues from hog production. The results show that at coverage levels of 95 percent or lower, the fair insurance premiums for this product on a well-diversified Iowa hog...

Crop Insurance (PowerPoint)

Palavras-chave: Correlations; Diversification; Livestock; Volatilities; Whole-farm revenue insurance; Livestock Production/Industries; Risk and Uncertainty.

Ano: 2003

URL: http://purl.umn.edu/18497

Hart, Chad E..

Biofuels: Potential Production Capacity, Effects on Grain and Livestock Sectors, and Implications for Food Prices and Consumers

Palavras-chave: Risk and Uncertainty.

Ano: 2011

URL: http://purl.umn.edu/106138

Hayes, Dermot J.; Babcock, Bruce A.; Fabiosa, Jacinto F.; Tokgoz, Simla; Elobeid, Amani E.; Yu, Tun-Hsiang (Edward); Dong, Fengxia; Hart, Chad E.; Chavez, Eddie C.; Pan, Suwen; Carriquiry, Miguel A.; Dumortier, Jerome.

We examined four evolution paths of the biofuel sector using a partial equilibrium world agricultural sector model in CARD that includes the new RFS in the 2007 EISA, a two-way relationship between fossil energy and biofuel markets, and a new trend toward corn oil extraction in ethanol plants. At one extreme, one scenario eliminates all support to the biofuel sector when the energy price is low, while the other extreme assumes no distribution bottleneck in ethanol demand growth when the energy price is high. The third scenario considers a pure market force driving ethanol demand growth because of the high energy price, while the last is a policy-induced shock with removal of the biofuel tax credit when the energy price is high. Standard results hold where...

Tipo: Journal Article

Palavras-chave: Biofuel; EISA; Ethanol; Tax credit; World agricultural sector model; Agribusiness; Consumer/Household Economics; Crop Production/Industries; Demand and Price Analysis; International Relations/Trade; Livestock Production/Industries; Political Economy; Production Economics; Resource /Energy Economics and Policy; Q13; Q18; Q38.

Ano: 2009

URL: http://purl.umn.edu/53093

Impact of Biofuel Industry Expansion on Grain Utilization and Distribution: Preliminary Results of Iowa Grain and Biofuel Survey

Yu, Tun-Hsiang (Edward); Hart, Chad E..

This paper examines the impact of biofuel expansion on grain utilization and distribution at the state and cropping district level as most of grain producers and handlers are directly influenced by the local changes. We conducted a survey to understand the utilization and flows of corn, ethanol and its co-products, such as dried distillers grains (DDG) in Iowa. Results suggest that the rapidly expanding ethanol industry has a significant impact on corn utilization in Iowa. Comparing to the earlier survey results, ethanol plants drew a considerable amount of corn away from traditional destination markets, such as feeders or export markets. A major portion of corn supplies came from in-state sources, while the sales of Iowa ethanol and DDG were dominated by...

Implications of the WTO on the Redesign of U.S. Farm Policy

Palavras-chave: Biofuel; Grain; Utilization; Marketing.

Ano: 2009

URL: http://purl.umn.edu/46847

Hart, Chad E.; Babcock, Bruce A..

RETHINKING AGRICULTURAL DOMESTIC SUPPORT UNDER THE WORLD TRADE ORGANIZATION

Palavras-chave: Agricultural and Food Policy; International Relations/Trade.

Ano: 2001

URL: http://purl.umn.edu/18286

Beghin, John C.; Hart, Chad E..

This paper focuses on the third pillar of the Uruguay Round Agreement on Agriculture (URAA) of the World Trade Organization (WTO), the discipline of agricultural domestic support. The paper examines the current definition of agricultural domestic support used by the WTO, focusing on the Aggregate Measure of Support (AMS) and other forms of support that are less to least distorting (Blue and Green Box payments). The analysis looks at the recent experience of four member states (the United States, the European Union, Japan, and Brazil). The structure of recent support varies considerably by country. Some countries, notably the United States, have strategically used the de minimis exemption to deflate their support figures substantially in order to remain...

CAP Reform and the WTO: Potential Impacts on EU Agriculture

Palavras-chave: Aggregate measure of support; Agricultural domestic support; Amber box; AMS; Blue box; Doha; Green box; World Trade Organization; WTO; Agricultural and Food Policy; International Relations/Trade.

Ano: 2004

URL: http://purl.umn.edu/18296

Binfield, Julian C.R.; Donnellan, Trevor; Hanrahan, Kevin F.; Hart, Chad E.; Westhoff, Patrick C..

In 2003 an agreement was finalized to instigate arguably the most significant reform of the European Union's (EU) Common Agricultural Policy (CAP) since its inception. In the Luxembourg Agreement many of the direct payments that have been linked to production are decoupled and instead provided in the form of a land-based payment. The reforms did not include any significant changes to either EU border support or the ability of the EU to utilize export subsidies that have been widely criticized by other nations. Even though the reforms do not directly address trade in agricultural products it is argued that World Trade Organization (WTO) concerns played a significant role in the designs of the reforms. In this paper an analysis of the Luxembourg reforms and...

Farm-Level Analysis of Risk Management Proposals

Palavras-chave: International Relations/Trade.

Ano: 2004

URL: http://purl.umn.edu/20020

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;...

Option Pricing on Renewable Commodity Markets

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

Ano: 2000

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

Jin, Na; Lence, Sergio H.; Hart, Chad E.; Hayes, Dermot J..

Options markets on agricultural commodities with maturities that exceed 13 months seldom trade. Our hypothesis is that this market failure is due to the absence of an accurate option pricing model for commodities where mean reversion can be expected. Standard option pricing models assume proportionality between price variance and time to maturity. This proportionality is not a valid assumption for commodities where supply response works to bring prices back to production costs. The model suggests that traditional option pricing models will overprice long-term options on these markets.

A Spatial Approach to Addressing Weather Derivative Basis Risk: A Drought Insurance Example

Palavras-chave: Commodity futures and option; Price mean reverting; Seasonality; Agricultural Finance; Financial Economics.

Ano: 2010

URL: http://purl.umn.edu/60955

Paulson, Nicholas D.; Hart, Chad E..

Computing Average Per Acre Indemnity Payments for Corn in Iowa

Palavras-chave: Risk and Uncertainty.

Ano: 2006

URL: http://purl.umn.edu/21249

Hart, Chad E.; Smith, Darnell B..

This study estimates average per acre indemnity payments for Iowa corn for traditional multiple-peril crop insurance and two new revenue insurance products, Crop Revenue Coverage and Income Protection. Yield and price difference distributions are formed and employed in 1,000 simulation runs. From these simulations, corn yields for all 99 Iowa countries and futures prices are collected. These are used to calculate per acre indemnities under the three insurance products. Income Protection has the smallest per acre indemnities across the state, followed by multiple-peril and Crop Revenue Coverage. Per acre indemnities are the lowest in northwest Iowa and highest in southeast Iowa.

How Much "Safety" Is Available under the U.S. Proposal to the WTO?

Palavras-chave: Crop Production/Industries.

Ano: 1996

URL: http://purl.umn.edu/18326

Babcock, Bruce A.; Hart, Chad E..

Critics of the U.S. proposal to the World Trade Organization (WTO) made in October 2005 are correct when they argue that adoption of the proposal would significantly reduce available support under the current farm program structure. Using historical prices and yields from 1980 to 2004, we estimate that loan rates would have to drop by 9 percent and target prices would have to drop by 10 percent in order to meet the proposed aggregate Amber Box and Blue Box limits. While this finding should cheer those who think that reform of U.S. farm programs is long overdue, it alarms those who want to maintain a strong safety net for U.S. agriculture. The dilemma of needing to reform farm programs while maintaining a strong safety net could be resolved by redesigning...

CROP INSURANCE RATES AND THE LAWS OF PROBABILITY

Palavras-chave: Farm safety net; Revenue targeting; U.S. farm programs; WTO; International Relations/Trade.

Ano: 2005

URL: http://purl.umn.edu/18284

Babcock, Bruce A.; Hart, Chad E.; Hayes, Dermot J..

Increased crop insurance subsidies have increased the demand for insurance at coverage levels higher than the traditional level of 65 percent. Premium rates for higher levels of yield insurance under the Federal Actual Production History (APH) program equal the premium rate at the 65 percent coverage level multiplied by a rate relativity factor that varies by coverage level but not by crop or region. In this paper, we examine the consistency of these constant rate relativity factors with the laws of probability by determining the maximum 65 percent premium rate that is consistent with a well-defined yield distribution. We find that more than 50 percent of U.S. counties have premium rates for corn, soybeans, and wheat that are not consistent with the laws...

Livestock Revenue Insurance

Palavras-chave: Risk and Uncertainty.

Ano: 2002

URL: http://purl.umn.edu/18345

Hart, Chad E.; Babcock, Bruce A.; Hayes, Dermot J..

This study outlines several possible structures for livestock revenue insurance. The policies take the form of an exotic optionan Asian basket option. The actuarially fair premiums for these policies are equal to the prices of the options they represent. Due to the complexity of pricing Asian basket options, we have combined two techniques for pricing options to reach the actuarially fair premiums. Projected premiums, producer welfare, and program efficiency are evaluated for the insurance products and existing market tools. Using efficiency ratios and certainty equivalent returns, we compare the insurance policies to strategies involving existing futures and options.

The 2007/08 Iowa Grain and Biofuel Flow Study: A Survey Report

Palavras-chave: Insurance; Livestock; Revenue; Options; Asian basket option; Premiums; Livestock Production/Industries; Risk and Uncertainty.

Ano: 2000

URL: http://purl.umn.edu/18356

Yu, Tun-Hsiang (Edward); Hart, Chad E..

Driven by the expanding production of biofuels, the linkage between the agricultural and energy markets is evolving, and that has changed the market for agricultural commodities dramatically. These developments in agricultural markets consequently shifted the distribution of domestic grains and feeds and the utilization of shipping modes for these agricultural products. As the leading producer of corn, soybeans, and biofuels, Iowa is at the forefront of this shift. Because of the importance of maintaining an adequate state transportation system to accommodate the evolving patterns of grain and biofuel flows, it is important to have current information about grain flows from farms and country elevators to destination markets, along with the information...

Tipo: Report

Palavras-chave: Agribusiness; Crop Production/Industries.

Ano: 2009

URL: http://purl.umn.edu/52602

Estimating the Costs of MPCI Under the 1994 Crop Insurance Reform Act

Hart, Chad E.; Smith, Darnell B..

This study estimates the government costs of federal crop insurance under the framework of the Crop Insurance Reform Act of 1994. The history of federal crop insurance is outlined to examine how MPCI has evolved. The 1994 Act addressed two of the major problems of MPCI: low participation and additional disaster assistance. Total government costs for the FCIC and MPCI are estimated to be more than $2 billion, on average, from 1996 to 2003, with half of this amount being in the form of premium subsidies paid by the government.

Risk Management Instruments for Water Reallocations

Palavras-chave: Risk and Uncertainty.

Ano: 1996

URL: http://purl.umn.edu/18504

Hart, Chad E..

Federal and state governments are searching for programs and/or policies to deal with the risks linked with uncertainty in water supplies and demands. Within the United States, competition among agricultural, urban, and environmental concerns for water is increasing. Drought conditions and water use restrictions have, at times, limited water supplies for these varied uses. The federal government stands in a unique position as both a major supplier and demander of water. As such, the federal government has put forward several programs for water conservation, information, and usage. One area in which the federal government has not made significant progress is the issue of risk management and compensation for water reallocations. When natural forces or...