IDEAS home Printed from https://ideas.repec.org/p/ags/n13412/285782.html

Analyzing Crop Revenue Safety Net Program Alternatives and Implications on Marketing Decisions

Author

Listed:
  • Jansen, Jim A.
  • Lubben, Bradley D.

Abstract

This study evaluates the crop revenue effects of combining federal farm income safety net programs, crop insurance policies, and marketing arrangements. Eight representative farms across Nebraska are used to stochastically simulate the financial impact of nine risk management strategies to determine the optimal outcome during the 2011 production year. Procedures utilized to evaluate the stochastic results included the Expected Value, Coefficient of Variation, Stochastic Dominance, StopLight, and Stochastic Efficiency with Respect to a Function. Results indicate that out of the set of predefined strategies, the portfolio combination involving the government program choice of the Direct and Counter-Cyclical Program, crop revenue insurance with the fall harvest option, and hedging for the simulated time period provides the optimal outcome across the majority of representative farm scenarios in 2011.

Suggested Citation

  • Jansen, Jim A. & Lubben, Bradley D., 2012. "Analyzing Crop Revenue Safety Net Program Alternatives and Implications on Marketing Decisions," 2012 Conference, April 16-17, 2012, St. Louis, Missouri 285782, NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    • Handle: RePEc:ags:n13412:285782
    DOI: 10.22004/ag.econ.285782
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/285782/files/confp10-12.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.285782?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
    ---><---

    References listed on IDEAS

    as
    1. Joost M.E. Pennings & Olga Isengildina-Massa & Scott H. Irwin & Philip Garcia & Darrel L. Good, 2008. "Producers' complex risk management choices," Agribusiness, John Wiley & Sons, Ltd., vol. 24(1), pages 31-54.
    2. Woolverton, Andrea E. & Edwin, Young, 2009. "Factors Influencing ACRE Program Enrollment," Economic Research Report 55954, United States Department of Agriculture, Economic Research Service.
    3. Mario J. Miranda, 1991. "Area-Yield Crop Insurance Reconsidered," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(2), pages 233-242.
    4. Coble, Keith H. & Dismukes, Robert & Thomas, Sarah E., 2007. "Policy Implications of Crop Yield and Revenue Variability at Differing Levels of Disaggregation," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon 9759, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Cooper, Joseph C., 2009. "Economic Aspects of Revenue-Based Commodity Support," Economic Research Report 55838, United States Department of Agriculture, Economic Research Service.
    6. Campiche, Jody L. & Harris, Wesley L., 2010. "Lessons Learned in the Southern Region after the First Year of Implementation of the New Commodity Programs," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 42(3), pages 1-9, August.
    7. Velandia, Margarita & Rejesus, Roderick M. & Knight, Thomas O. & Sherrick, Bruce J., 2009. "Factors Affecting Farmers' Utilization of Agricultural Risk Management Tools: The Case of Crop Insurance, Forward Contracting, and Spreading Sales," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 41(1), pages 107-123, April.
    8. Campiche, Jody & Harris, Wes, 2010. "Lessons Learned in the Southern Region after the First Year of Implementation of the New Commodity Programs," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 42(3), pages 491-499, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Arriola, Christine & Dismukes, Robert & Coble, Keith H. & Ubilava, David & Cooper, Joseph C., "undated". "Alternatives to a State-Based ACRE Program: Expected Payments Under a National, Crop District, or County Base," Economic Research Report 262235, United States Department of Agriculture, Economic Research Service.
    2. Mitchell, Paul D. & Rejesus, Roderick M. & Coble, Keith H. & Knight, Thomas O., 2011. "Analyzing Farmer Participation Intentions and Enrollment Rates for the Average Crop Revenue Election (ACRE) Program," Staff Paper Series 560, University of Wisconsin, Agricultural and Applied Economics.
    3. Mbonane, Nobuhle Duduzile, 2018. "An analysis of farmers’ preferences for crop insurance: a case of maize farmers in Swaziland," Research Theses 334771, Collaborative Masters Program in Agricultural and Applied Economics.
    4. Dismukes, Robert & Arriola, Christine & Coble, Keith H., "undated". "ACRE Program Payments and Risk Reduction: An Analysis Based on Simulations of Crop Revenue Variability," Economic Research Report 262248, United States Department of Agriculture, Economic Research Service.
    5. Enjolras, Geoffroy & Capitanio, Fabian & Adinolfi, Felice, 2012. "The Demand for Crop Insurance: Combined Approaches for France and Italy," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 13(01), pages 1-18.
    6. Jansen, Jim A. & Lubben, Bradley D. & Stockton, Matthew C., "undated". "Analyzing Crop Revenue Safety Net Program Alternatives and Impacts on Producers and Program Costs," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119784, Southern Agricultural Economics Association.
    7. Mitchell, Paul D. & Rejesus, Roderick M. & Coble, Keith H. & Knight, Thomas O., 2010. "A Real Options Framework for Analyzing Program Participation as Human Capital Investments: The Case of the Average Crop Revenue Election (ACRE) Program," Staff Paper Series 547, University of Wisconsin, Agricultural and Applied Economics.
    8. Muhammad Amjed Iqbal & Azhar Abbas & Syed Asif Ali Naqvi & Muhammad Rizwan & Abdus Samie & Umar Ijaz Ahmed, 2020. "Drivers of Farm Households’ Perceived Risk Sources and Factors Affecting Uptake of Mitigation Strategies in Punjab Pakistan: Implications for Sustainable Agriculture," Sustainability, MDPI, vol. 12(23), pages 1-17, November.
    9. Marius Michels & Oliver Mußhoff, 2025. "Psychological factors as triggers for futures trading adoption: evidence from German farmers," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 13(1), pages 1-19, December.
    10. Pigeon, Mathieu & Frahan, Bruno Henry de & Denuit, Michel, "undated". "Actuarial evaluation of the EU proposed farm income stabilisation tool," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122485, European Association of Agricultural Economists.
    11. Leppälä, Jarkko & Rautiainen, Risto & Kauranen, Ilkka, . "Analysis of risk management tools applicable in managing farm risks: A literature review," International Journal of Agricultural Management, Institute of Agricultural Management, vol. 4(3).
    12. Pigeon, Mathieu & Henry de Frahan, Bruno & Denuit, Michel, 2012. "Evaluation of the EU proposed Farm Income Stabilisation Tool," LIDAM Discussion Papers ISBA 2012026, Université catholique de Louvain, Institute of Statistics, Biostatistics and Actuarial Sciences (ISBA).
    13. Caroline Roussy & Aude Ridier & Karim Chaib & Marie Boyet, 2018. "Marketing contracts and risk management for cereal producers," Agribusiness, John Wiley & Sons, Ltd., vol. 34(3), pages 616-630, June.
    14. repec:hum:wpaper:sfb649dp2014-025 is not listed on IDEAS
    15. Norton, Michael & Boucher, Stephen & Verteramo Chiu, Leslie, 2015. "Geostatistics, Basis Risk, and Index Insurance," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205755, Agricultural and Applied Economics Association.
    16. Kemeze, Francis Hypolite, 2018. "The Impact of Agricultural Insurance on the Demand for Supplemental Irrigation: A Randomized Controlled Trial Experimental Evidence in Northern Ghana," Monographs: Applied Economics, AgEcon Search, number 302442.
    17. Vigani, Mauro & Khafagy, Amr & Berry, Robert, 2024. "Public spending for agricultural risk management: Land use, regional welfare and intra-subsidy substitution," Food Policy, Elsevier, vol. 123(C).
    18. William M. Fonta & Safietou Sanfo & Abbi M. Kedir & Djiby R. Thiam, 2018. "Estimating farmers’ willingness to pay for weather index-based crop insurance uptake in West Africa: Insight from a pilot initiative in Southwestern Burkina Faso," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 6(1), pages 1-20, December.
    19. Assa, Hirbod & Sharifi, Hossein & Lyons, Andrew, 2021. "An examination of the role of price insurance products in stimulating investment in agriculture supply chains for sustained productivity," European Journal of Operational Research, Elsevier, vol. 288(3), pages 918-934.
    20. Cordier, Jean & Guinvarc'h, Martial, 2002. "Assurance et finance agricoles. Une approche descriptive et comparative," Économie rurale, French Society of Rural Economics (SFER Société Française d'Economie Rurale), vol. 272.
    21. Gbêtondji Melaine Armel Nonvide, 2021. "Adoption of agricultural technologies among rice farmers in Benin," Review of Development Economics, Wiley Blackwell, vol. 25(4), pages 2372-2390, November.

    More about this item

    Keywords

    ;

    Statistics

    Access and download statistics

    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:n13412:285782. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: http://www.farmdoc.illinois.edu/nccc134/ .

    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.