Abstract
Whole-farm revenue insurance is frequently suggested as a conceptually attractive alternative to commodity-specific insurance, but attempts to deliver farm-level whole-farm revenue insurance (FWFI) have been fraught with underwriting and actuarial challenges. This study develops customizable area-based whole-farm insurance (CAWFI) that overcomes some known impediments to existing designs. Certainty equivalents are generated for representative farms in Kansas, North Dakota, Illinois, and Mississippi. We find that a restricted CAWFI design generates significant risk reduction at much lower cost than FWFI.
| Original language | English |
|---|---|
| Pages (from-to) | 27-44 |
| Number of pages | 18 |
| Journal | Journal of Agricultural and Resource Economics |
| Volume | 42 |
| Issue number | 1 |
| State | Published - Jan 2017 |
Bibliographical note
Publisher Copyright:Copyright 2017 Western Agricultural Economics Association.
Funding
Lekhnath Chalise is an agricultural economist at the U.S. Department of Agriculture, Economic Research Services. Keith H. Coble is a Giles Distinguished Professor and Barry J. Barnett is a professor in the Agricultural Economics Department at Mississippi State University. J. Corey Miller Miller is an economic analyst at the University Research Center at Mississippi Institutions of Higher Learning. This research was supported by the Mississippi Agricultural Experiment Station. We also acknowledge support from the National Institute of Food and Agriculture, U.S. Department of Agriculture, under Hatch project 603150. The views expressed here are not necessarily those of Economic Research Services or U.S. Department of Agriculture Review coordinated by David K. Lambert.
| Funders | Funder number |
|---|---|
| Mississippi Agricultural and Forestry Experiment Station, Mississippi State University | |
| U.S. Department of Agriculture | 603150 |
| National Institute of Food and Agriculture |
Keywords
- Crop insurance
- Farm policy
- Multivariate simulation
- Risk
ASJC Scopus subject areas
- Animal Science and Zoology
- Agronomy and Crop Science
- Economics and Econometrics
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