An Assessment of the Canadian Federal-Provincial Crop Production Insurance Program under Future Climate Change Scenarios in Ontario
AbstractResearch and observations indicate climate change has and will have an impact on On- tario eld crop production. Little research has done to forecast how climate change might in uence the Canadian Federal-Provincial Crop Insurance program, including its premium rates and reserve fund balances, in the future decades. This paper proposes using a mixture of two normal yield probability distribution model to model crop yield conditions under hypothetical climate change scenarios. Then superimposes Crop Insur- ance premium rate and reserve fund balance calculations onto the yield model to forecast their trends and uctuation situations in the future decades. We nd under the scenarios where climate change alters the probability of a lower yield year occurring and where climate change alters yield averages, both have more signi cant impacts on premium rates and reserve fund balances, compared to the scenarios where climate change alters yield variations. The results of this research will help Agricorp Ltd. identify the likely frequency and magnitude of both insurance premium rate uctuations and reserve fund balance uctuations under di erent climate change scenarios. Therefore the results can be used to help Agricorp Ltd. identify and forecast both premium rate uctuation risk and reserve fund liquidity risk.
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Bibliographic InfoPaper provided by Agricultural and Applied Economics Association in its series 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. with number 151213.
Date of creation: 2013
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This paper has been announced in the following NEP Reports:
- NEP-AGR-2013-07-05 (Agricultural Economics)
- NEP-ALL-2013-07-05 (All new papers)
- NEP-ENV-2013-07-05 (Environmental Economics)
- NEP-FOR-2013-07-05 (Forecasting)
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