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Comparison of Alternative Safety Net Programs for the 2000 Farm Bill

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  • Schumann, Keith D.
  • Feldman, Paul A.
  • Richardson, James W.
  • Smith, Edward G.

Abstract

As Congress begins its debate for the 2002 farm bill, there have been calls for a counter cyclical safety net that will provide a better basis for targeting longer term planning than exists with ad hoc emergency assistance. Further subsidization of the multi-peril crop insurance (MPCI) program has been proposed, as well as reliance on a farm and ranch risk management (FARRM) account to help farmers. A whole farm revenue income support program and several variations of national income supplement programs have been put forward. A comprehensive analysis of different safety net alternatives using a common methodology is needed so farmers and policy makers can make objective comparisons. The objective of this paper is to quantitatively analyze the economic effects of alternative safety net/insurance programs on farmers in the Southern United States. The objective is accomplished by simulating representative crop farms in the South over the 2001-2005 planning horizon for alternative safety net options. The simulated net present value distributions for the farms are compared using certainty equivalents to determine the value of alternative safety net options to feed grain, cotton and rice farms in the South.

Suggested Citation

  • Schumann, Keith D. & Feldman, Paul A. & Richardson, James W. & Smith, Edward G., 2001. "Comparison of Alternative Safety Net Programs for the 2000 Farm Bill," Working Papers 42781, Texas A&M University, Agricultural and Food Policy Center.
    • Handle: RePEc:ags:tamfwp:42781
    DOI: 10.22004/ag.econ.42781
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    References listed on IDEAS

    as
    1. Adams, Gary M. & Richardson, James W., 2001. "Exploring Options For A New Farm Bill," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 33(2), pages 1-10, August.
    2. Richardson, James W. & Klose, Steven L. & Gray, Allan W., 2000. "An Applied Procedure For Estimating And Simulating Multivariate Empirical (Mve) Probability Distributions In Farm-Level Risk Assessment And Policy Analysis," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 32(2), pages 1-17, August.
    3. repec:ags:joaaec:v:33:y:2001:i:2:p:261-270 is not listed on IDEAS
    4. Babcock, Bruce A. & Beghin, John C. & Mohanty, Samarendu & Fuller, Frank H. & Fabiosa, Jacinto F. & Kaus, Phillip J. & Fang, Cheng & Hart, Chad E. & Kovarik, Karen & Womack, Abner W. & Young, Robert E, 2000. "FAPRI 2000 U.S. Agricultural Outlook," FAPRI Staff Reports 32054, Food and Agricultural Policy Research Institute (FAPRI).
    5. repec:ags:joaaec:v:32:y:2000:i:2:p:299-315 is not listed on IDEAS
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