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Premium Subsidy Changes and Demand for Crop Insurance

Author

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  • Lee, Dong Won
  • Diersen, Matthew A.
  • Janssen, Larry
  • Gustafson, Cole R.

Abstract

Crop insurance is widely used on major crops raised in the Northern Plains. Prospective reductions in the crop insurance premium subsidy are commonly expected to result in lower use of insurance. Corn and soybean producers in South Dakota responded to the shift in subsidy levels beginning in 2001 by shifting toward revenue products and higher amounts of insurance. Producers chose a product type depending on the size of the revenue price election level, relative yield and premium rate. Producers chose an amount of liability depending on the relative yield, acres insured, revenue price election level and premium rate.

Suggested Citation

  • Lee, Dong Won & Diersen, Matthew A. & Janssen, Larry & Gustafson, Cole R., 2006. "Premium Subsidy Changes and Demand for Crop Insurance," 2006 Agricultural and Rural Finance Markets in Transition, October 2-3, 2006, Washington, DC 133086, Regional Research Committee NC-1014: Agricultural and Rural Finance Markets in Transition.
    • Handle: RePEc:ags:nc2006:133086
    DOI: 10.22004/ag.econ.133086
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    References listed on IDEAS

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