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Reduction of Yield and Income Risk Under Alternative Crop Insurance and Disaster Assistance Plans

Author

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  • Carriker, Gordon L.
  • Williams, Jeffery R.
  • Barnaby, Glenn Arthur, Jr.
  • Black, J. Roy

Abstract

This study compares the effectiveness of five crop insurance/disaster assistance plans: an individual farm yield insurance plan similar to the current FCIC multi-peril program ; two area yield insurance plans; a farm yield disaster assistance plan; and an area yield disaster assistance plan. These methods are examined for reduction in yield and gross income variability with and without participation in the government deficiency payment programs using farm-level yield data from 98 dryland wheat farms and 38 dryland corn farms in Kansas . Although individual farm yield insurance is complex, suffers from moral hazard and adverse selection problems, and is likely to be the most expensive to administer , it provides more yield and gross income risk reduction than any of the alternative insurance/disaster assistance plans.

Suggested Citation

  • Carriker, Gordon L. & Williams, Jeffery R. & Barnaby, Glenn Arthur, Jr. & Black, J. Roy, 1990. "Reduction of Yield and Income Risk Under Alternative Crop Insurance and Disaster Assistance Plans," Staff Papers 118191, Kansas State University, Department of Agricultural Economics.
    • Handle: RePEc:ags:ksaesp:118191
    DOI: 10.22004/ag.econ.118191
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    References listed on IDEAS

    as
    1. Jerry R. Skees & Michael R. Reed, 1986. "Rate Making for Farm-Level Crop Insurance: Implications for Adverse Selection," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(3), pages 653-659.
    2. Barnaby, Glenn Arthur, Jr. & Skees, Jerry R., 1990. "PUBLIC POLICY FOR CATASTROPIDC YIELD RISK: An Alternative Crop Insurance Program," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 5(2), pages 1-3.
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    Risk and Uncertainty;

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