To read this content please select one of the options below:

Challenges in the design of crop revenue insurance

Barry K. Goodwin (North Carolina State University, Raleigh, North Carolina, USA)

Agricultural Finance Review

ISSN: 0002-1466

Article publication date: 5 May 2015

645

Abstract

Purpose

The federal crop insurance program has become the cornerstone of US agricultural policy. Since its introduction in the mid-1990s, crop revenue insurance has grown in prominence and now represents nearly 90 percent of liability for major crops. The pricing and design of revenue insurance raises a number of important challenges. The 2014 Farm Bill brought about several important changes in the program, resulting in a moving target for analysts and researchers. The paper aims to discuss these issues.

Design/methodology/approach

The risks are of a multivariate nature and are likely to be highly dependent on one another. The crop insurance setting is also constantly changing, with technological changes in production practices and highly volatile commodity prices. Compounding these challenges is the fact that US policymakers continually change the program.

Findings

The program has indeed undergone many changes and a number of important research questions need to be addressed.

Originality/value

Original research based upon recent policy.

Keywords

Acknowledgements

Goodwin is William Neal Reynolds Distinguished Professor in the Departments of Economics and Agricultural and Resource Economics at North Carolina State University. The helpful comments of participants at the 2014 IARFIC Conference are gratefully acknowledged. This research was supported by a partnership with the US Forest Service and by the North Carolina Agricultural Research Service. Direct correspondence to Goodwin at Box 8109, North Carolina State University, Raleigh, NC, 27695, e-mail: barry_goodwin@ncsu.edu.

Citation

Goodwin, B.K. (2015), "Challenges in the design of crop revenue insurance", Agricultural Finance Review, Vol. 75 No. 1, pp. 19-30. https://doi.org/10.1108/AFR-03-2015-0015

Publisher

:

Emerald Group Publishing Limited

Copyright © 2015, Emerald Group Publishing Limited

Related articles