Search results

1 – 10 of over 1000
To view the access options for this content please click here
Article

Michael Popp and Margot Rudstrom

A set of crop alternatives ranging from traditional, low risk to less common and/or high risk crops is ranked according to their impact on overall risk using two measures…

Abstract

A set of crop alternatives ranging from traditional, low risk to less common and/or high risk crops is ranked according to their impact on overall risk using two measures. These two measures would aid cropping decisions by providing (1) a priori guidance on overall risk impact, and (2) a means to reduce the need for complex E‐V frontier estimation. Results suggest the number of crops that may depend on the riskiness of crop alternatives form which a producer chooses. Some reductions in necessary calculations for E‐V analysis are therefore suggested.

Details

Agricultural Finance Review, vol. 60 no. 1
Type: Research Article
ISSN: 0002-1466

Keywords

To view the access options for this content please click here
Article

Bright O. Asante, Renato A. Villano and George E. Battese

The purpose of this paper is to investigate the characteristics of crop-livestock diversification among smallholders in the forest-savannah agroecological zone of Ghana.

Abstract

Purpose

The purpose of this paper is to investigate the characteristics of crop-livestock diversification among smallholders in the forest-savannah agroecological zone of Ghana.

Design/methodology/approach

The study uses a stochastic input distance function to investigate the evidence of economies of diversification and its effect on determining diversification decisions of smallholders in Ghana. Furthermore, this study also explores evidence of scale economies in integrated crop-livestock systems among smallholder farmers.

Findings

The empirical results show that economies of diversification are significant in determining diversification decisions of smallholders. The economies of scale are evident in integrated crop-livestock systems in Ghana, suggesting that opportunities exist to expand crop-livestock outputs without employing additional inputs or improved production technologies. Crop-livestock diversification is a desirable strategy for improving overall farm productivity among smallholders in Ghana. Economies of diversification were found to be significant among the output combinations, maize with other crops and other crops with livestock, in integrated crop-livestock production systems.

Research limitations/implications

This study is based on a cross-sectional data set. Hence, the findings may be subject to some limitations; however, the authors have sought to minimise such limitations.

Practical implications

The results imply that crop-livestock diversification is a desirable strategy for improving overall farm productivity. Therefore, the findings are useful for policymakers to design appropriate strategies for enhancing the production of specific output combinations in crop-livestock diversification systems among smallholders in Ghana. Specifically, such policies should promote the production and integration of crops such as legumes with other crops, and livestock with other crops in diversified farming systems to enhance overall farm productivity. This will reduce food insecurity and poverty among rural farm households and the entire rural population.

Originality/value

These results indicate that to improve crop-livestock productivity through diversification, and reduce the effect of climate variability, it is imperative to provide the enabling environment that will facilitate and encourage production of these output combinations among smallholders in Ghana. The empirical results enhance the literature by providing empirical evidence of the complementary synergies and economies of diversification in integrated farming systems and, hence, make recommendations for improving these farming systems.

Peer review

The peer review history for this paper is available at: https://publons.com/publon/10.1108/IJSE-04-2019-0274.

Details

International Journal of Social Economics, vol. 47 no. 1
Type: Research Article
ISSN: 0306-8293

Keywords

To view the access options for this content please click here
Article

Ashok K. Mishra, Hisham S. El‐Osta and Carmen L. Sandretto

Enterprise diversification is a self‐insuring strategy used by farmers to protect against risk. This study examines the impact of various farm, operator, and household…

Abstract

Enterprise diversification is a self‐insuring strategy used by farmers to protect against risk. This study examines the impact of various farm, operator, and household characteristics on the level of onfarm enterprise diversification. Evidence exists that larger farms are more specialized. Also, farmers who participate in off‐farm work, farms located near urban areas, or farms with higher debt‐to‐asset ratios are less likely to be diversified. In contrast, evidence suggests there is a significant positive relationship between diversification and whether the farm business has crop insurance, is organized as a sole proprietorship, or receives any direct payments from current farm commodity programs.

Details

Agricultural Finance Review, vol. 64 no. 2
Type: Research Article
ISSN: 0002-1466

Keywords

To view the access options for this content please click here
Article

Sayed Hossain, Nik Hashim Nik Mustapha and Lee Tak Chen

Farming in Bangladesh is confronted with various types of uncertainties, which contribute to farmers’ income volatility over the years. As a result, cereal, mainly rice…

Abstract

Farming in Bangladesh is confronted with various types of uncertainties, which contribute to farmers’ income volatility over the years. As a result, cereal, mainly rice, which is a less riskier crop remained dominantly planted in the current farm plan. But the return generated from rice cultivation has not been able to improve the livelihood of the poor, as rice profitability is low compared to some profitable but risky crops like jute and vegetables. To investigate the behavioral pattern of the farmers towards risk, Dhaka division, largely known as central region of Bangladesh, is selected. The prevailing farm plan of Dhaka division is compared with the efficient one at the current level of expected return in order to check whether the current farm plan is risky or otherwise. Quadratic and MOTAD as well as linear programming techniques have been employed for the analysis. The result of the study reveals that the prevailing farm plan in Dhaka division is risky compared to the efficient plan. Since the current return level is low, the study has recommended that more jute and vegetables should be planted to achieve higher remuneration.

Details

International Journal of Social Economics, vol. 29 no. 4
Type: Research Article
ISSN: 0306-8293

Keywords

To view the access options for this content please click here
Article

Timothy A. Delbridge and Robert P. King

The USDA’s Risk Management Agency (RMA) made several changes to the crop insurance products available to organic growers for the 2014 crop year. Most notably, a 5 percent…

Abstract

Purpose

The USDA’s Risk Management Agency (RMA) made several changes to the crop insurance products available to organic growers for the 2014 crop year. Most notably, a 5 percent premium surcharge was removed and organic-specific transitional yields (t-yields) were issued for the first time. The purpose of this paper is to use farm-level organic crop yield data to analyze the impact of these reforms on producer insurance outcomes and compare the insurance options for new organic growers.

Design/methodology/approach

This study uses a unique panel data set of organic corn and soybean yields to analyze the impact of organic crop insurance reforms. Actual Production History values and premium rates are calculated for each farm and crop yield sequence. Producer loss ratios and subsidized premium wedges are compared for yield, revenue and area-risk products before and after the instituted reforms.

Findings

Results indicate that RMA succeeded in improving the actuarial soundness of the organic insurance program, though further refinement of organic t-yields may be necessary to accurately reflect the yield potential of organic producers and avoid reductions in program participation.

Originality/value

This paper provides insight into the effectiveness of reforms intended to improve the actuarial soundness of organic crop insurance and demonstrates the effect that the reforms are likely to have on new and existing organic farms. Because this analysis uses data collected independently of RMA and includes farms that may or may not have purchased crop insurance, it avoids the self-selection problems that might affect analyses using crop insurance program data.

Details

Agricultural Finance Review, vol. 79 no. 2
Type: Research Article
ISSN: 0002-1466

Keywords

To view the access options for this content please click here
Article

Wenbin Wu, Ximing Wu, Yu Yvette Zhang and David Leatham

The purpose of this paper is to bring out the development of a flexible model for nonstationary crop yield distributions and its applications to decision-making in crop insurance.

Abstract

Purpose

The purpose of this paper is to bring out the development of a flexible model for nonstationary crop yield distributions and its applications to decision-making in crop insurance.

Design/methodology/approach

The authors design a nonparametric Bayesian approach based on Gaussian process regressions to model crop yields over time. Further flexibility is obtained via Bayesian model averaging that results in mixed Gaussian processes.

Findings

Simulation results on crop insurance premium rates show that the proposed method compares favorably with conventional estimators, especially when the underlying distributions are nonstationary.

Originality/value

Unlike conventional two-stage estimation, the proposed method models nonstationary crop yields in a single stage. The authors further adopt a decision theoretic framework in its empirical application and demonstrate that insurance companies can use the proposed method to effectively identify profitable policies under symmetric or asymmetric loss functions.

Details

Agricultural Finance Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0002-1466

Keywords

To view the access options for this content please click here
Article

Vincent H. Smith

Rent seeking is endemic to the process through which any policy or regulatory initiative is developed in the USA. The purpose of this paper is to show how farm and other…

Abstract

Purpose

Rent seeking is endemic to the process through which any policy or regulatory initiative is developed in the USA. The purpose of this paper is to show how farm and other interest groups have formed coalitions to benefit themselves at the expense of the federal government by examining the legislative history of the federal crop insurance program.

Design/methodology/approach

The federal crop insurance legislation and the way in which the USDA Risk Management Agency manages federal crop insurance program are replete with complex and subtle policy initiatives. Using a new theoretical framework, the study examines how, since 1980, three major legislative initiatives – the 1980 Federal Crop Insurance Act, the 1994 Crop Insurance Reform Act and the 2000 Agricultural Risk Protection Act – were designed to jointly benefit farm interest groups and the agricultural insurance industry, largely through increases in government subsidies.

Findings

Each of the three legislative initiatives examined here included provisions that, when considered individually, benefitted farmers and adversely affected the insurance industry, and vice versa. However, the joint effects of the multiple adjustments included in each of those legislative initiatives generated net benefits for both sets of interest groups. The evidence, therefore, indicates that coalitions formed between the farm and insurance lobbies to obtain policy changes that, when aggregated, benefited both groups, as well as banks with agricultural lending portfolios. However, those benefits came at an increasingly substantial cost to taxpayers through federal government subsidies.

Originality/value

This is the first analysis of the US federal crop insurance program to examine the issue of coalition formation.

Details

Agricultural Finance Review, vol. 80 no. 3
Type: Research Article
ISSN: 0002-1466

Keywords

To view the access options for this content please click here
Article

Anton Bekkerman, Vincent H. Smith and Myles J. Watts

The aim of this paper is to show how provisions of the Supplemental Revenue Assistance Payments (SURE) program impacts production practices, and empirically examine…

Abstract

Purpose

The aim of this paper is to show how provisions of the Supplemental Revenue Assistance Payments (SURE) program impacts production practices, and empirically examine changes in crop insurance participation rates as a means of measuring producer responses to the program.

Design/methodology/approach

The structure of the SURE program is described and a stylized theoretical model is used to show the SURE program's effects on farm‐level crop insurance and production decisions. A county‐level cross‐sectional empirical specification with regional fixed effects is used to test the hypothesis that producers who are most likely to benefit from production practice re‐optimization are more likely to participate in crop insurance.

Findings

Results from empirical analyses of corn, soybean, and wheat production areas show that the SURE program has had substantial impacts on crop insurance participation by producers who are more likely to receive SURE indemnities and exploit moral hazard opportunities.

Research limitations/implications

Because the program has only recently been introduced, empirical estimates of the program's long‐run impacts are not estimable.

Practical implications

Results indicate that the program can have unexpected market consequences, with increased frequency and size of SURE indemnity claims than the Congressional Budget Office anticipated and increases in aggregate tax payer subsidies for both the crop insurance and SURE program. These outcomes can have important implications on motivating a restructuring of the program in the next farm bill.

Social implications

Increased tax payer expenditures on the SURE and crop insurance programs in the form of subsidies can lead to non‐trivial reductions in social welfare.

Originality/value

This research is the first to develop a rigorous model of the SURE program's impacts on producer responses and associated effects on crop insurance participation. The study also provides empirical evidence of these effects.

Details

Agricultural Finance Review, vol. 72 no. 3
Type: Research Article
ISSN: 0002-1466

Keywords

To view the access options for this content please click here
Article

Kwame Asiam Addey, John Baptist D. Jatoe and George Tsey-Mensah Kwadzo

The aim of this paper is to identify the factors that influence rice farmers' decisions to adopt crop insurance and premium payments (willingness to pay [WTP] amounts)…

Abstract

Purpose

The aim of this paper is to identify the factors that influence rice farmers' decisions to adopt crop insurance and premium payments (willingness to pay [WTP] amounts). The paper also demonstrates the usefulness of the complementary log-log (cloglog) truncated Poisson double-hurdle model as an alternative hurdle model.

Design/methodology/approach

The study first investigated the nature of the dependent variable, which had non-normal residuals and was overdispersed. The probit truncated normal regression double-hurdle model was tried but it failed the normality and homoscedasticity tests; hence, the cloglog truncated Poisson double-hurdle model was employed in the study.

Findings

An estimated 61% of respondents would purchase crop insurance, despite farmers not having prior experience with this product. Amongst others, the factors that influence insurance adoption amongst rice farmers are the share of rice in total income, reliability perception of crop insurance schemes and the probability of failure to achieve target yields. The latter helps the authors to address adverse selection, a central issue to the viability of such an insurance programme. The determinants of farmers' WTP are also identified.

Research limitations/implications

Sampling was limited to farmers using irrigation and living in one region of Ghana, which may limit the study’s wider applicability.

Originality/value

As far as the authors are aware, this study is the first to select the appropriate hurdle model based on established properties of the dependent variable on this topic – crop insurance decisions.

Details

Agricultural Finance Review, vol. 81 no. 1
Type: Research Article
ISSN: 0002-1466

Keywords

To view the access options for this content please click here
Article

A.G. Adeeth Cariappa, Darshnaben P. Mahida, Priyanka Lal and B.S. Chandel

The purpose of this paper is to identify the correlates of crop insurance adoption and estimate the impact on debt and farm income.

Abstract

Purpose

The purpose of this paper is to identify the correlates of crop insurance adoption and estimate the impact on debt and farm income.

Design/methodology/approach

The authors used nationally representative data from National Sample Survey Office (NSSO), which consisted of 35,200 farming households. Logit and propensity score matching (PSM) (nearest neighbor, caliper and kernel matching) techniques were used.

Findings

With only around 5% of households insuring their crops and 87% of them not receiving claims, crop insurance in India has failed. Logit model estimates of correlates of adoption indicated that households with larger family size, lower social group, less education, lower standard of living and poor were more likely to be left out of the ambit of crop insurance. Further, propensity score estimates suggested that households with access to crop insurance had significantly lesser outstanding debt with positive effect on input costs and crop income. The authors’ results were in contrast to the risk balancing theory.

Practical implications

Results of our work encourage us to rethink and restructure the crop insurance policy design in India. With credit and insurance markets interlinked by design and as the risk balancing in the farm business found absent, policies to strengthen both the markets are the need of the hour. To encourage more farmers to take up crop insurance, revenue-based indemnity calculation could be tried in India.

Originality/value

Impact estimates from three different algorithms of matching were compared and tested for robustness. Consistent average treatment effect on treated (ATT) was considered for interpretation and policy implications. Since the data are from a nationally representative survey, results are believed to be of extreme value to policy makers and insurance providers as it can be generalized.

Details

Agricultural Finance Review, vol. 81 no. 2
Type: Research Article
ISSN: 0002-1466

Keywords

1 – 10 of over 1000