Multiple-peril crop insurance: Successes and challenges

Barry Barnett

Research output: Contribution to journalArticlepeer-review

17 Scopus citations

Abstract

Purpose – The purpose of this paper is to examine international experience with multiple-peril crop insurance (MPCI). Named peril crop insurance is available in most countries but MPCI is less common. While named peril insurance is widely successful, MPCI has a checkered history. In most cases, MPCI actuarial experience has been poor and large premium subsidies have been required to incentivize purchasing. Design/methodology/approach – International experience with MPCI is reviewed with a particular focus on the USA which has the largest MPCI program in the world. Rationales for government involvement in facilitating MPCI offers are examined and future challenges are explored. Findings – In most cases, MPCI actuarial experience has been poor and large premium subsidies have been required to incentivize purchasing. MPCI purchasing has increased dramatically in recent years but so have government expenditures to support MPCI programs. Significant challenges remain with providing cost-effective MPCI coverage for crop farmers. Originality/value – While previous articles have reviewed MPCI in the USA, this paper also considers experiences in other countries. Future challenges and research needs are described.

Original languageEnglish
Pages (from-to)200-216
Number of pages17
JournalAgricultural Finance Review
Volume74
Issue number2
DOIs
StatePublished - Jul 1 2014

Bibliographical note

Publisher Copyright:
© Emerald Group Publishing Limited.

Keywords

  • Crop insurance
  • Risk

ASJC Scopus subject areas

  • Agricultural and Biological Sciences (miscellaneous)
  • Economics, Econometrics and Finance (miscellaneous)

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