IDEAS home Printed from https://ideas.repec.org/a/ags/joaaec/355560.html
   My bibliography  Save this article

Effects of the 2014 Farm Bill Policies on Cotton Production

Author

Listed:
  • Devadoss, Stephen
  • Luckstead, Jeff

Abstract

We develop a model for a representative risk-averse cotton farmer to analyze the impact of crop insurance policies (Revenue Protection [RP], Yield Protection, Stacked Income Protection Plan [STAX], and Supplemental Coverage Option [SCO]). The model is calibrated and numerically optimized to quantify the effects of different insurance policy combinations on input use (moral hazard), insurance coverage levels, premiums, and certainty equivalent. When the farmer elects only RP, the optimal coverage rate is 80%. Under RP and STAX, the optimal RP coverage rate is 70% and the STAX coverage rate is 90%. RP and STAX is the optimal policy combination based on certainty equivalents. The RP and SCO combination has the lowest impact of input use.

Suggested Citation

  • Devadoss, Stephen & Luckstead, Jeff, 2018. "Effects of the 2014 Farm Bill Policies on Cotton Production," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 50(2), February.
    • Handle: RePEc:ags:joaaec:355560
    DOI: 10.22004/ag.econ.355560
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/355560/files/effects-of-the-2014-farm-bill-policies-on-cotton-production.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.355560?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:joaaec:355560. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/saeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.