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Economic Impact Of Scab With Alternative Risk Management Strategy: The Case Of Crop Quality Insurance In Barley

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  • Nganje, William E.
  • Tiapo, Napoleon M.
  • Wilson, William W.

Abstract

Managing quality risks, especially grain quality, has been a challenge facing farmers, grain merchandisers, and policymakers for many years. With the advent of genetically modified organisms (GMOs), food safety, and identity preservation, this is even more challenging today. In this paper, an equilibrium crop insurance model was developed and used to analyze the impact of quality risks on equilibrium coverage levels and risk premiums that suppliers of insurance and barley producers would be willing to provide when yield and revenue insurance instruments explicitly incorporate quality risks. The asking price concept and sensitivity analysis were used to evaluate farmers' behavior after they purchase crop quality insurance and to provide guidance and direction in the development of risk-efficient quality insurance instruments.

Suggested Citation

  • Nganje, William E. & Tiapo, Napoleon M. & Wilson, William W., 2002. "Economic Impact Of Scab With Alternative Risk Management Strategy: The Case Of Crop Quality Insurance In Barley," Agribusiness & Applied Economics Report 23641, North Dakota State University, Department of Agribusiness and Applied Economics.
    • Handle: RePEc:ags:nddaae:23641
    DOI: 10.22004/ag.econ.23641
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    References listed on IDEAS

    as
    1. Nganje, William E. & Johnson, D. Demcey & Wilson, William W. & Leistritz, F. Larry & Bangsund, Dean A. & Tiapo, Napoleon M., 2001. "Economic Impacts Of Fusarium Head Blight In Wheat And Barley: 1998-2000," Agribusiness & Applied Economics Report 23515, North Dakota State University, Department of Agribusiness and Applied Economics.
    2. D. Demcey Johnson & William W. Wilson & Matthew A. Diersen, 2001. "Quality Uncertainty, Procurement Strategies, and Grain Merchandising Risk: Vomitoxin in Spring Wheat," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 23(1), pages 102-119.
    3. Serrao, Amilcar & Coelho, Luis, 2000. "The Role Of Area-Yield Crop Insurance In Farmers' Adjustment Against Risk In A Dryland Region Of Portugal," 2000 Annual meeting, July 30-August 2, Tampa, FL 21841, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Coble, Keith H. & Heifner, Richard G. & Zuniga, Manuel, 2000. "Implications Of Crop Yield And Revenue Insurance For Producer Hedging," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(2), pages 1-21, December.
    5. Nganje, William E. & Kaitibie, Simeon & Wilson, William W. & Leistritz, F. Larry & Bangsund, Dean A., 2004. "Economic Impacts Of Fusarium Head Blight In Wheat And Barley: 1993-2001," Agribusiness & Applied Economics Report 23627, North Dakota State University, Department of Agribusiness and Applied Economics.
    6. Barnett, Barry J. & Coble, Keith H., 1999. "Understanding Crop Insurance Principles: A Primer For Farm Leaders," Research Reports 15784, Mississippi State University, Department of Agricultural Economics.
    7. Johnson, D. Demcey & Flaskerud, George K. & Taylor, Richard D. & Satyanarayana, Vidyashankara, 1998. "Economic Impacts Of Fusarium Head Blight In Wheat," Agricultural Economics Reports 23437, North Dakota State University, Department of Agribusiness and Applied Economics.
    8. John Duncan & Robert J. Myers, 2000. "Crop Insurance under Catastrophic Risk," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 842-855.
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