IDEAS home Printed from https://ideas.repec.org/p/ags/aaea91/271256.html
   My bibliography  Save this paper

Area-Measured Crop Insurance And Disaster Aid For Wheat And Grain Sorghum

Author

Listed:
  • Williams, Jeffery R.
  • Carriker, Gordon L.
  • Barnaby, G. Art
  • Harper, Jayson K.
  • Black, J. Roy

Abstract

Area crop insurance and disaster aid program designs are compared to an individual farm-yield insurance design like the current FCIC multiple peril program. Stochastic dominance analysis of net return distributions for 45 wheat and grain sorghum farms in southcentral Kansas is used to determine which strategy is preferred. The area disaster aid program is preferred by generally risk-averse managers over the individual farm-yield design for wheat and sorghum. When individual farm crop insurance is compared directly with ~rea crop insurance, given an equivalent level of government liability for each, individual insurance is usually preferred by risk-averse managers. When the premium for the area insurance is subsidized by 10 percent or more, slightly risk-averse managers usually prefer area insurance to full-cost individual insurance. For area crop insurance to be preferred by managers that are more strongly risk averse, a higher subsidy level is required.

Suggested Citation

  • Williams, Jeffery R. & Carriker, Gordon L. & Barnaby, G. Art & Harper, Jayson K. & Black, J. Roy, 1991. "Area-Measured Crop Insurance And Disaster Aid For Wheat And Grain Sorghum," 1991 Annual Meeting, August 4-7, Manhattan, Kansas 271256, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea91:271256
    DOI: 10.22004/ag.econ.271256
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/271256/files/aaea-1991-083.pdf
    Download Restriction: no
    File URL: https://ageconsearch.umn.edu/record/271256/files/aaea-1991-083.pdf?subformat=pdfa
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.271256?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Lemieux, Catharine M. & Richardson, James W. & Nixon, Clair J., 1982. "Federal Crop Insurance Vs. Ascs Disaster Assistance For Texas High Plains Cotton Producers: An Application Of Whole-Farm Simulation," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 7(2), pages 1-14, December.
    2. Carriker, Gordon L. & Williams, Jeffery R. & Barnaby, Glenn Arthur, Jr. & Black, J. Roy, 1991. "Yield And Income Risk Reduction Under Alternative Crop Insurance And Disaster Assistance Designs," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 16(2), pages 1-13, December.
    3. Carriker, Gordon L. & Williams, Jeffery R. & Barnaby, Glenn Arthur, Jr. & Black, J. Roy, 1990. "Risk Reduction Under An Area Yield-Based Crop Insurance Plan for Southcentral Kansas Winter Wheat," Staff Papers 133756, Kansas State University, Department of Agricultural Economics.
    4. Raskin, Rob & Cochran, Mark J., 1986. "Interpretations And Transformations Of Scale For The Pratt-Arrow Absolute Risk Aversion Coefficient: Implications For Generalized Stochastic Dominance," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 11(2), pages 1-7, December.
    5. Leatham, David J. & McCarl, Bruce A. & Richardson, James W., 1987. "Implications of Crop Insurance for Farmers and Lenders," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 19(2), pages 113-120, December.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Calum G. Turvey & Zahirul Islam, 1995. "Equity and efficiency considerations in area versus individual yield insurance," Agricultural Economics, International Association of Agricultural Economists, vol. 12(1), pages 23-35, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Calum G. Turvey & Zahirul Islam, 1995. "Equity and efficiency considerations in area versus individual yield insurance," Agricultural Economics, International Association of Agricultural Economists, vol. 12(1), pages 23-35, April.
    2. Bruce A. McCarl & David A. Bessler, 1989. "Estimating An Upper Bound On The Pratt Risk A Version Coefficient When The Utility Function Is Unknown," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 33(1), pages 56-63, April.
    3. Cochran, Mark J., 1986. "Stochastic Dominance: The State Of The Art In Agricultural Economics," Regional Research Projects > 1986: S-180 Annual Meeting, March 23-26, 1986, Tampa, Florida 271995, Regional Research Projects > S-180: An Economic Analysis of Risk Management Strategies for Agricultural Production Firms.
    4. Brent A. Gloy & Timothy G. Baker, 2002. "The Importance of Financial Leverage and Risk Aversion in Risk-Management Strategy Selection," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(4), pages 1130-1143.
    5. Skees, Jerry R., 1987. "Future Research Needs On Federal Multiple Peril Crop Insurance," Regional Research Projects > 1987: S-180 Annual Meeting, March 22-25, 1987, San Antonio, Texas 272346, Regional Research Projects > S-180: An Economic Analysis of Risk Management Strategies for Agricultural Production Firms.
    6. Larson, James A. & Roberts, Roland K. & Tyler, Donald D. & Duck, Bob N. & Slinsky, Stephen P., 1998. "Nitrogen-Fixing Winter Cover Crops and Production Risk: A Case Study for No-Tillage Corn," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 30(1), pages 163-174, July.
    7. Buchholz, Matthias & Musshoff, Oliver, 2014. "The role of weather derivatives and portfolio effects in agricultural water management," Agricultural Water Management, Elsevier, vol. 146(C), pages 34-44.
    8. Purola, Tuomo & Lehtonen, Heikki, 2020. "Evaluating profitability of soil-renovation investments under crop rotation constraints in Finland," Agricultural Systems, Elsevier, vol. 180(C).
    9. Dilshad Ahmad & Muhammad Afzal & Abdur Rauf, 2019. "Analysis of wheat farmers’ risk perceptions and attitudes: evidence from Punjab, Pakistan," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 95(3), pages 845-861, February.
    10. Featherstone, Allen M. & Moss, Charles B., 1989. "The Economic Efficiency Of Diversification: Certainty Equivalence And The Mean-Variance Model," Staff Papers 133739, Kansas State University, Department of Agricultural Economics.
    11. Seo, Sangtaek & Leatham, David J. & Mitchell, Paul D., 2003. "Risk Sharing and Incentives with Crop Insurance and External Equity Financing," 2003 Regional Committee NCT-194, October 6-7, 2003; Kansas City, Missouri 132523, Regional Research Committee NC-1014: Agricultural and Rural Finance Markets in Transition.
    12. Duffy, Patricia A. & Richardson, James W. & Smith, Edward G., 1986. "Effects of Alternative Farm Programs and Levels of Price Variability on Texas Cotton Farms," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 18(2), pages 97-106, December.
    13. Mapp, Harry P., 1983. "Crop Insurance Research Needs: Comments," 1983: S-180 Annual Meeting, March 28-30, 1983, San Antonio, Texas 271716, Regional Research Projects > S-180: Risk Management Strategies for Agricultural Production Firms: Perspectives and Research Issues.
    14. Carriker, Gordon L., 1993. "Factor Input Demand Subject to Economic and Environmental Risk: The Case of Nitrogen Fertilizer in Corn Production," Staff Papers 118154, Kansas State University, Department of Agricultural Economics.
    15. Jansson, Torbjörn & Heckelei, Thomas & Gocht, Alexander & Basnet, Shyam Kumar & Zhang, Yinan & Neuenfeldt, Sebastian, 2014. "Analysing impacts of changing price variability with estimated farm risk-programming models," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182665, European Association of Agricultural Economists.
    16. Emilio Cerdá & Sonia Quiroga Gómez, 2009. "Economic Value of Weather Forecasting Systems Information: A Risk Aversion Approach," Working Papers 2009-04, FEDEA.
    17. Drynan, Ross G., 1986. "A Note On Optimal Rules For Stochastic Efficiency Analysis," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 30(1), pages 1-10, April.
    18. Hinson, Roger A. & Lee, John G. & Huh, Mooyul, 1990. "Evaluation Of Selected Fresh Vegetable Terminal Markets: A Stochastic Dominance Approach," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 22(2), pages 1-10, December.
    19. Williams, J. R. & DeLano, D. R. & Heiniger, R. W. & Vanderlip, R. L. & Llewelyn, R. V., 1999. "Replanting strategies for grain sorghum under risk," Agricultural Systems, Elsevier, vol. 60(2), pages 137-155, May.
    20. Feuz, Dillon M. & Fausti, Scott W. & Wagner, John J., 1995. "Risk And Market Participant Behavior In The U.S. Slaughter-Cattle Market," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(1), pages 1-10, July.

    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:ags:aaea91:271256. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: AgEcon Search (email available below). General contact details of provider: http://www.aaea.org .

    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.