The Actuarial Performance of Prevented Planting Buy-Up Coverage

Dylan Turner and Francis Tsiboe

No 387586, ARPC Brief from North Dakota State University

Abstract: On November 28, 2025, the USDA Risk Management Agency finalized the elimination of the 5% prevented planting (PP) buy-up option. Using policy-level data from 2011–2024, this brief examines whether buy-up coverage historically degraded the actuarial performance of the Federal Crop Insurance Program. While theory suggest that optional PP coverage could lead to adverse selection, national-level results show that buy-up loss ratios (0.818) were lower than base coverage (0.866). These findings suggest that buy-up premiums adequately covered additional indemnities.

Keywords: Agricultural and Food Policy; Agricultural Finance; Risk and Uncertainty (search for similar items in EconPapers)
Date: 2026-01-09
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/387586/files/ARPC%20Brief%202026-01.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:arpcbr:387586

DOI: 10.22004/ag.econ.387586

Access Statistics for this paper

More papers in ARPC Brief from North Dakota State University
Bibliographic data for series maintained by AgEcon Search ().