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Implications and Evaluations of Crop Insurance Choices for Cotton Farmers Under the 2014 Farm Bill

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  • Luitel, Kishor P.
  • Hudson, Darren
  • Knight, Thomas

Abstract

The Agricultural Act of 2014 introduced new crop insurance policies to manage agricultural risk, especially to cotton farmers. A representative farm panel was used to elicit the yield distribution of the farm, county, and correlation. Results suggest that the optimal underlying insurance policy is Revenue Protection at a 75% coverage level for both high- and low-productivity farms even with a Yield Exclusion provision. The Stacked Income Protection Plan benefit is mostly attributable to a higher insurance premium subsidy. For any crop, efficient agricultural risk management can be achieved through understanding the guaranteed yield and its relation to the farm and county yield.

Suggested Citation

  • Luitel, Kishor P. & Hudson, Darren & Knight, Thomas, . "Implications and Evaluations of Crop Insurance Choices for Cotton Farmers Under the 2014 Farm Bill," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 0(Number 4).
    • Handle: RePEc:ags:joaaec:355982
    DOI: 10.22004/ag.econ.355982
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    References listed on IDEAS

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    1. Cooper, Joseph & Hungerford, Ashley & O'Donoghue, Erik, 2015. "Interactions of Shallow Loss Support and Traditional Federal Crop Insurance: Building a Framework for Assessing Commodity Support Issues for the Next Farm Act," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205310, Agricultural and Applied Economics Association.
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    2. Moharram Ainollahi Ahmadabadi & Mohammad Ghahremanzadeh & Ghader Dashti & Seyed-Ali Hosseini-Yekani, 2025. "Evaluating Producer Welfare Benefits of Whole-Farm Revenue Insurance," Agriculture, MDPI, vol. 15(2), pages 1-20, January.

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