A publication of AAEA

A publication of AAEA
Current Issues in Risk Management and U.S. Agricultural Policy

Current Issues in Risk Management and U.S. Agricultural Policy

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Theme Overview: Current Issues in Risk Management and U.S. Agricultural Policy

Joshua D. Woodard

Risk management issues have taken a central focus in the current agricultural policy debate. This six-article Choices thematic issue focuses on current issues in risk management and agriculture policy and provides an assessment of important issues surrounding the ongoing farm bill negotiations.

2013 Farm Bill Dairy Title Proposals Redistribute Program Benefits toward States with Larger Farms

Joshua D. Woodard and Dustin Baker

The 2013 Farm Bill proposals, if ratified, will enact a significant overhaul of the Dairy Title. This article highlights some important aspects of the 2013 proposals relative to current policy. The new proposals will typically redistribute program benefits toward states/regions with larger farms relative to current policy.

Ten Considerations Regarding the Role of Crop Insurance in the Agricultural Safety Net

Thomas P. Zacharias and Keith J. Collins

Crop insurance has taken on an increased role in farmers' risk management decisions and agricultural policy. This article lays out several reasons for this increased role in farm policy and then concludes with some thoughts on the current structure and direction of the current crop insurance program.

Can We Do Better than Crop Insurance? The Case for Farmer Owned Crop Insurance Savings Accounts

Octavio A. Ramirez and Gregory Colson

Despite persistent improvement efforts since its inception, crop insurance remains costly to taxpayers and is perceived by many as an ineffective and inequitable agricultural safety net. This paper reviews key criticisms of crop insurance and discusses an alternative approach based on the concept of farmer-owned crop insurance savings accounts.

Farm Debt Use by Farms with Crop Insurance

Jennifer Ifft, Todd Kuethe, and Mitchell Morehart

The federal crop insurance (FCI) program could lead to increased use of debt financing by U.S. farms, either through its impacts on lender or producer behavior. Using nationally representative farm survey data, we find that participation in FCI is associated with higher leverage and higher probability of credit default.

Deductibles versus Coinsurance in Shallow-Loss Crop Insurance

Thomas W. Sproul, David Zilberman, and Joseph C. Cooper

Shallow-loss policies take center stage in many proposals for the current farm bill. We examine the choice of deductible coverage versus coinsurance to show risk premiums and loss adjustment costs matter little when comparing policies. Thus, policy makers should base decisions more on costs to taxpayers than specific risk management features.

How Will the Farm Bill's Supplemental Revenue Programs Affect Crop Insurance?

Keith Collins and Harun Bulut

Free supplemental farm programs in the 2013 Congressional farm bills complement underlying crop insurance coverage. However, the bills' highly subsidized crop insurance supplemental revenue programs may reduce underlying crop insurance coverage at high coverage levels, and the combination of the two may substitute for current county crop insurance plans