Managing the Agricultural Revenue Risk in Brazil: Implications for Developing a Crop Insurance Program
Vitor Augusto Ozaki and
Andreia Cristina de Oliveira Adami
No 151289, 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. from Agricultural and Applied Economics Association
Since 2003 crop insurance programs became the focus of agricultural policy in Brazil. Given the increasing interest in insurance, accurate calculation of premium values is of great importance. We address the issue of the revenue distribution at the farm-level and its implication to the Brazilian crop insurance contract. We estimate the probability of loss by using the Skew-normal distribution of revenue in the West of Parana (South of Brazil). Results show that insurers (empirical) rates tend to underestimate the risk in the lower coverage levels (50% and 60%). At the level of 70% of coverage the Empirical Rate and the Skew-Normal Rate are similar on average.
Keywords: Agricultural and Food Policy; Risk and Uncertainty (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea13:151289
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