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Risk Reduction and the 2014 Farm Bill

Ashley Hungerford, Erik O'Donoghue and Mesbah Motamed

No 204845, 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California from Agricultural and Applied Economics Association

Abstract: The 2014 Agricultural Act introduced several risk management programs for commodities. Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC) provide price and revenue protection, respectively, to eligible producers of covered commodities. Also in addition to existing federally-backed crop insurance policies, the Supplemental Coverage Option (SCO), a new program, provides subsidized add-on insurance coverage to producers of rice, cotton, corn, soybeans, sorghum, wheat, and spring barley. Through simulations of prices and yields, we examine the relationship between the support payments generated by these new programs and the magnitude of the risk reduction they produce, both under their current parameters as well as alternatives. The simulations also reveal the distribution of risk reduction among counties across the United States.

Keywords: Agricultural and Food Policy; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 26
Date: 2015
New Economics Papers: this item is included in nep-agr, nep-ias and nep-rmg
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea15:204845

DOI: 10.22004/ag.econ.204845

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