Does Crop Insurance Reduce the Need for Cash Reserves in Savings Accounts?

J. Marc Raulston, James Richardson (), Joe Outlaw and George M. Knapek

No 56413, 2010 Annual Meeting, February 6-9, 2010, Orlando, Florida from Southern Agricultural Economics Association

Abstract: One of the most fundamental and traditional risk management tools available to agricultural producers is a savings account. Cash reserves in savings provide a safety net for producers, allowing financial obligations and living expenses to be met when unexpected shortfalls in income occur. Crop insurance, another risk management tool, likely reduces the cash reserves required to be held in savings as it aids in mitigating risks ranging from total disasters to uncertainties in market conditions. This study utilizes a stochastic farm level simulation model in a representative farm framework to evaluate the impacts of alternative crop insurance scenarios on levels of savings necessary to maintain target ending cash reserve numbers for producers in major production areas of the Southern United States.

Keywords: Agricultural and Food Policy; Farm Management; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 11
Date: 2010
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/56413/files/Raulston%20SAEA%202010.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:saea10:56413

DOI: 10.22004/ag.econ.56413

Access Statistics for this paper

More papers in 2010 Annual Meeting, February 6-9, 2010, Orlando, Florida from Southern Agricultural Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().