IDEAS home Printed from https://ideas.repec.org/a/oup/ajagec/v85y2003i2p318-335.html
   My bibliography  Save this article

Crop Insurance in a Political Economy: An Alternative Perspective on Agricultural Policy

Author

Listed:
  • Robert Innes

Abstract

Lawmakers often subsidize farmers in times of financial distress. This article models this political impulse as a constraint on government farm policy, describing how ex ante government farm insurance can deter ex post“disaster relief” and improve production incentives by countering the moral hazard that otherwise prevails. Absent ex ante government policy, ex post relief takes the form of revenue insurance, which prompts excessive entry into farm production and under-production by operating farmers. Ex ante government policy can raise economic and political welfare by buying out low productivity farmers and offering profitable farmers a combination of revenue insurance, price supports, and a program participation fee. Copyright 2003, Oxford University Press.

Suggested Citation

  • Robert Innes, 2003. "Crop Insurance in a Political Economy: An Alternative Perspective on Agricultural Policy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(2), pages 318-335.
    • Handle: RePEc:oup:ajagec:v:85:y:2003:i:2:p:318-335
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/1467-8276.00122
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Matthew Stuart & Cindy Yu & David A. Hennessy, 2023. "The Impact of Stocks on Correlations between Crop Yields and Prices and on Revenue Insurance Premiums using Semiparametric Quantile Regression," Papers 2308.11805, arXiv.org, revised Jun 2024.
    2. Arias, Diego & Covarrubias, Katia, 2006. "Agricultural Insurance in Mesoamerica: An Opportunity to Deepen Rural Financial Markets," IDB Publications (Working Papers) 3042, Inter-American Development Bank.
    3. Che, Yuyuan & Feng, Hongli & Hennessy, David A., 2017. "The Geography and Psychology of Participation in U.S. Federal Crop Insurance Programs," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 259190, Agricultural and Applied Economics Association.
    4. Coleman, Jane A. & Shaik, Saleem, 2009. "Time-Varying Estimation of Crop Insurance Program in Altering North Dakota Farm Economic Structure," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49516, Agricultural and Applied Economics Association.
    5. Diego Arias & Katia Covarrubias, 2006. "Agricultural Insurance in Mesoamerica: An Opportunity to Deepen Rural Financial Markets," IDB Publications (Working Papers) 36538, Inter-American Development Bank.
    6. World Bank, 2005. "Managing Food Price Risks and Instability in an Environment of Market Liberalization," World Bank Publications - Reports 8264, The World Bank Group.
    7. Yang Zou & Qingbin Wang, 2012. "Impacts of direct government payments on US agriculture: evidence from 1960‐2010 data," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 4(2), pages 188-199, May.
    8. Xiaodong Du & Hongli Feng & David A. Hennessy, 2017. "Rationality of Choices in Subsidized Crop Insurance Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 99(3), pages 732-756.
    9. Tong Wang & David A. Hennessy, 2015. "Strategic Interactions Among Private and Public Efforts When Preventing and Stamping Out a Highly Infectious Animal Disease," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(2), pages 435-451.
    10. Xiaodong Du & Hongli Feng & David A. Hennessy, 2017. "Rationality of Choices in Subsidized Crop Insurance Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 99(3), pages 732-756.
    11. Heidelbach, Olaf, 2007. "Efficiency of selected risk management instruments: An empirical analysis of risk reduction in Kazakhstani crop production," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 40, number 92323.
    12. Bulut, Harun, 2017. "Managing Catastrophic Risk in Agriculture through Ex Ante Subsidized Insurance or Ex Post Disaster Aid," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 42(3), September.
    13. Mavroutsikos, Charalampos & Giannakas, Konstantinos & Walters, Cory G., 2018. "Crop Insurance under Asymmetric Information and Different Government Objectives," 2018 Annual Meeting, August 5-7, Washington, D.C. 273880, Agricultural and Applied Economics Association.
    14. Hennessy, David A., 2011. "Modeling Stochastic Crop Yield Expectations with a Limiting Beta Distribution," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 36(1), pages 1-15, April.
    15. Smith, Katherine R., 2004. "The Growing Prevalence of Emergency, Disaster, and Other Ad Hoc Farm Program Payments: Implications for Agri-Environmental and Conservation Programs," Agricultural and Resource Economics Review, Cambridge University Press, vol. 33(1), pages 1-7, April.
    16. Xuche Gong & David A. Hennessy & Hongli Feng, 2023. "Systemic risk, relative subsidy rates, and area yield insurance choice," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(3), pages 888-913, May.
    17. Denis Nadolnyak & Valentina Hartarska, 2012. "Agricultural disaster payments in the southeastern US: do weather and climate variability matter?," Applied Economics, Taylor & Francis Journals, vol. 44(33), pages 4331-4342, November.
    18. Sasouli, Mohammad Reza & Karimzadeh, Majid & Jamnia, Abdul Rashid, 2022. "Investigating of Date Crop Insurance Expansion Inhibitory Factors in Iran: A Case Study from the Saravan Region," International Journal of Agricultural Management and Development (IJAMAD), Iranian Association of Agricultural Economics, vol. 12(4), December.
    19. Nadolnyak, Denis A. & Hartarska, Valentina M., 2009. "Weather, Climate, and Agricultural Disaster Payments in the Southeastern U.S," 2009 Conference, August 16-22, 2009, Beijing, China 51802, International Association of Agricultural Economists.
    20. Jisang Yu & Daniel A. Sumner, 2018. "Effects of subsidized crop insurance on crop choices," Agricultural Economics, International Association of Agricultural Economists, vol. 49(4), pages 533-545, July.
    21. Bulut, Harun & Collins, Keith J., 2013. "Political Economy of Crop Insurance Risk Subsidies under Imperfect Information," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150577, Agricultural and Applied Economics Association.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:ajagec:v:85:y:2003:i:2:p:318-335. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.