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Revenue Protection for Organic Producers: Too Much or Too Little

Ariel Singerman, Chad Hart () and Sergio Lence

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: A framework is developed to examine organic crop insurance established by the Risk ManagementAgency (RMA). Given that the RMA links organic and conventional crop prices, the modelis calibrated to reflect both markets to illustrate the impacts that pricing has on insurancecoverage. Findings indicate that at the 75% coverage level, the RMA's fixed-price factor impliesan effective coverage ranging from 43% to 105% depending on the ratio of planting-time organicto conventional market prices. Results suggest the RMA's program is likely to induce adverseselection because the nominal coverage level is likely to deviate substantially from the effectivecoverage.

Keywords: adverse selection; crop insurance; organic agriculture (search for similar items in EconPapers)
JEL-codes: Q12 Q14 (search for similar items in EconPapers)
Date: 2012-12-01
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Published in Journal of Agricultural and Resource Economics, December 2012, vol. 37 no. 3, pp. 415-434

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Journal Article: Revenue Protection for Organic Producers: Too Much or Too Little? (2012) Downloads
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Working Paper: Revenue Protection for Organic Producers: Too Much or Too Little? (2012) Downloads
Working Paper: Revenue protection for organic producers: too much or too little (2012) Downloads
Working Paper: Revenue Protection for Organic Producers: Too Much or Too Little (2011)
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