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Crop insurance in malting barley: a stochastic dominance analysis

Author

Listed:
  • William Wilson
  • Cole Gustafson
  • Bruce Dahl

Abstract

Purpose - Malting barley is an important specialty crop in the Northern Plains and growers mitigate risk with federally subsidized crop insurance and production contracts. The purpose of this paper is to quantify risks growers face due to “coverage gaps” in crop insurance that result in uncertain indemnity payments when their crop does not meet contract specifications. Design/methodology/approach - A stochastic dominance model is developed to evaluate alternative strategies for growers with differing risk attitudes and production practices (irrigation vs dryland). Findings - The results illustrate how alternative crop insurance provisions affect efficient choice sets for growers. Risk premiums for irrigated growers all point to valuations favoring more coverage, contracts, and malting option B. As the crop insurance industry matures in the functions it performs, it will become increasingly more important to address quality attributes. Originality/value - This paper addresses quality issues and coverage gaps in crop insurance provisions.

Suggested Citation

  • William Wilson & Cole Gustafson & Bruce Dahl, 2009. "Crop insurance in malting barley: a stochastic dominance analysis," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 69(1), pages 98-112, May.
    • Handle: RePEc:eme:afrpps:v:69:y:2009:i:1:p:98-112
    DOI: 10.1108/00021460910960499
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    Citations

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    Cited by:

    1. Turvey, Calum G., 2010. "Whole Farm Income Insurance in a Canadian Context," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61732, Agricultural and Applied Economics Association.
    2. Dahl, Bruce & Wilson, William W., 2018. "Risk premiums due to Fusarium Head Blight (FHB) in wheat and barley," Agricultural Systems, Elsevier, vol. 162(C), pages 145-153.
    3. Wilson, William W. & McKee, Greg & Nganje, William & Dahl, Bruce & Bangsund, Dean, 2017. "Economic Impact of USWBSI’s Scab Initiative to Reduce FHB," Agribusiness & Applied Economics Report 264672, North Dakota State University, Department of Agribusiness and Applied Economics.
    4. William W. Wilson & Bruce Dahl, 2014. "Contracting for Canola in the Great Plains States," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 62(1), pages 89-106, March.
    5. Colin A. Carter & Shon M. Ferguson, 2019. "Deregulation and regional specialization: Evidence from Canadian agriculture," Canadian Journal of Economics, Canadian Economics Association, vol. 52(4), pages 1497-1522, November.

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