Implications and Evaluations of Crop Insurance Choices for Cotton Farmers Under the 2014 Farm Bill

Kishor P. Luitel, Darren Hudson and Thomas Knight

Journal of Agricultural and Applied Economics, 2018, vol. Volume 46, issue Number 4

Abstract: The Agricultural Act of 2014 introduced new crop insurance policies to manage agricultural risk, especially to cotton farmers. A representative farm panel was used to elicit the yield distribution of the farm, county, and correlation. Results suggest that the optimal underlying insurance policy is Revenue Protection at a 75% coverage level for both high- and low-productivity farms even with a Yield Exclusion provision. The Stacked Income Protection Plan benefit is mostly attributable to a higher insurance premium subsidy. For any crop, efficient agricultural risk management can be achieved through understanding the guaranteed yield and its relation to the farm and county yield.

Keywords: Agricultural and Food Policy; Crop Production/Industries (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:ags:joaaec:355982

DOI: 10.22004/ag.econ.355982

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