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The Impact of the Average Crop Revenue Election (ACRE) Program on the Effectiveness of Crop Insurance

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  • Hong, Sung Wook
  • Power, Gabriel J.
  • Vedenov, Dmitry V.

Abstract

This paper analyzes the effect of the ACRE program adopted in the final version of the 2007 Farm Bill on the risk-reducing effectiveness of insurance products. To the best of our knowledge this is a first attempt to analyze the effect of the ACRE program on the risk management decisions of crop producers. In particular, we compare the risk-reducing effectiveness of the two most common insurance contracts — APH and CRC — under the provisions of the 2002 Farm Bill and under ACRE program for representative cotton producer in Texas and corn producer in Illinois. These particular crop/region combinations are selected so as to represent situations of low and high price-yield correlations, respectively.

Suggested Citation

  • Hong, Sung Wook & Power, Gabriel J. & Vedenov, Dmitry V., 2009. "The Impact of the Average Crop Revenue Election (ACRE) Program on the Effectiveness of Crop Insurance," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46755, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saeana:46755
    DOI: 10.22004/ag.econ.46755
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    References listed on IDEAS

    as
    1. Vedenov, Dmitry V. & Power, Gabriel J., 2008. "Risk-Reducing Effectiveness of Revenue versus Yield Insurance in the Presence of Government Payments," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 40(2), pages 1-17, August.
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    Keywords

    Agribusiness; Agricultural and Food Policy; Agricultural Finance; Crop Production/Industries; Risk and Uncertainty;
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