IDEAS home Printed from https://ideas.repec.org/p/ags/uersrr/276229.html
   My bibliography  Save this paper

Federal Risk Management Tools for Agricultural Producers: An Overview

Author

Listed:
  • Motamed, Mesbah
  • Hungerford, Ashley
  • Rosch, Stephanie
  • O’Donoghue, Erik
  • MacLachlan, Matthew
  • Astill, Gregory
  • Cessna, Jerry
  • Joseph Cooper

Abstract

This report describes the current landscape of Federal risk management policies, including the Agricultural Act of 2014, and analyzes the outcomes and interactions of these programs. Despite their common objective of risk reduction, Federal programs differ in their payment mechanisms and their impacts on producer revenue, and uptake has varied significantly across programs and crops. Area-loss insurance programs, such as the Stacked Income Protection Plan and Supplemental Coverage Option, received low enrollments, while applications to the Noninsured Crop Disaster Assistance Program witnessed sizable growth. Differences in program enrollment and program provisions across crops led the bulk of Agriculture Risk Coverage payments to go to producers with corn and soybean base acres, while most Price Loss Coverage payments went to rice, peanuts, and wheat base acres. Half of dairy producers enrolled in the Margin Protection Program for Dairy, but large national margins led to few payments in 2015 and 2016. In contrast, changes in program design led the Livestock Gross Margin for Dairy program to make significantly more indemnity payments per policy. Outside of dairy, the Livestock Forage Program remains the largest livestock support program, though outlays have fallen in recent years.

Suggested Citation

  • Motamed, Mesbah & Hungerford, Ashley & Rosch, Stephanie & O’Donoghue, Erik & MacLachlan, Matthew & Astill, Gregory & Cessna, Jerry & Joseph Cooper, 2018. "Federal Risk Management Tools for Agricultural Producers: An Overview," Economic Research Report 276229, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersrr:276229
    DOI: 10.22004/ag.econ.276229
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/276229/files/ERR-250.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.276229?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. Keith H. Coble & Robert Dismukes, 2008. "Distributional and Risk Reduction Effects of Commodity Revenue Program Design," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(3), pages 543-553.
    2. O'Donoghue, Erik J. & Hungerford, Ashley E. & Cooper, Joseph C. & Worth, Thomas & Ash, Mark, 2016. "The 2014 Farm Act Agriculture Risk Coverage, Price Loss Coverage, and Supplemental Coverage Option Programs' Effects on Crop Revenue," Economic Research Report 262201, United States Department of Agriculture, Economic Research Service.
    3. Hungerford, Ashley & O'Donoghue, Erik, 2016. "Federal Crop Insurance Options for Upland Cotton Farmers and Their Revenue Effects," Economic Research Report 249774, United States Department of Agriculture, Economic Research Service.
    4. Cooper, Joseph & Delbecq, Benoît, 2014. "A multi-region approach to assessing fiscal and farm level consequences of government support for farm risk management," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 3(3), pages 1-23, December.
    5. Hungerford, Ashley & Astill, Gregory & Effland, Anne, 2017. "Changes to the Noninsured Crop Disaster Assistance Program Under the Agricultural Act of 2014: Their Potential Risk Reduction Impacts," Economic Information Bulletin 262132, United States Department of Agriculture, Economic Research Service.
    6. Mark, Tyler B. & Burdine, Kenneth H. & Cessna, Jerry & Dohlman, Erik, 2016. "The Effects of the Margin Protection Program for Dairy Producers," Economic Research Report 262192, United States Department of Agriculture, Economic Research Service.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sungkwol Park & Barry K. Goodwin & Xiaoyong Zheng & Roderick M. Rejesus, 2020. "Contract elements, growing conditions, and anomalous claims behaviour in U.S. crop insurance," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 45(1), pages 157-183, January.
    2. Martinez, Steve W. & Park, Timothy, 2021. "Marketing Practices and Financial Performance of Local Food Producers: A Comparison of Beginning and Experienced Farmers," USDA Miscellaneous 313069, United States Department of Agriculture.
    3. Kovačević, Vlado & Jeločnik, Marko, 2019. "Development of risk management instruments in the EU," Rural Areas and Development, European Rural Development Network (ERDN), vol. 16.

    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. Turner, Dylan & Tsiboe, Francis & Baldwin, Katherine & Williams, Brian & Dohlman, Erik & Astill, Gregory & Skorbiansky, Sharon Raszap & Abadam, Vidalina & Yeh, D. Adeline & Knight, Russell, 2023. "Federal Programs for Agricultural Risk Management," Economic Information Bulletin 340216, United States Department of Agriculture, Economic Research Service.
    2. Beckman, Jayson & Dyck, John & Heerman, Kari, 2017. "The Global Landscape of Agricultural Trade, 1995-2014," Economic Information Bulletin 265270, United States Department of Agriculture, Economic Research Service.
    3. Hungerford, Ashley & Astill, Gregory & Effland, Anne, 2017. "Changes to the Noninsured Crop Disaster Assistance Program Under the Agricultural Act of 2014: Their Potential Risk Reduction Impacts," Economic Information Bulletin 262132, United States Department of Agriculture, Economic Research Service.
    4. Eric J Belasco & Joseph Cooper & Vincent H Smith, 2020. "The Development of a Weather‐based Crop Disaster Program," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(1), pages 240-258, January.
    5. 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.
    6. Hungerford, Ashley & O'Donoghue, Erik & Motamed, Mesbah, 2015. "Risk Reduction and the 2014 Farm Bill," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 204845, Agricultural and Applied Economics Association.
    7. Hungerford, Ashley & O'Donoghue, Erik, 2016. "Federal Crop Insurance Options for Upland Cotton Farmers and Their Revenue Effects," Economic Research Report 249774, United States Department of Agriculture, Economic Research Service.
    8. Cooper, Joseph & Delbecq, Benoît, 2014. "A multi-region approach to assessing fiscal and farm level consequences of government support for farm risk management," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 3(3), pages 1-23, December.
    9. Cooper, Joseph C. & Langemeier, Michael R. & Schnitkey, Gary D. & Zulauf, Carl R., 2009. "Constructing Farm Level Yield Densities from Aggregated Data: Analysis and Comparison of Approaches," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49216, Agricultural and Applied Economics Association.
    10. Gerlt, Scott & Thompson, Wyatt & Miller, Douglas, 2014. "Exploiting the Relationship between Farm-Level Yields and County-Level Yields for Applied Analysis," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 39(2), pages 1-18.
    11. Boussios, David & Castillo, Marcelo J. & Brewer, Brady E., 2018. "Impact of Counter-Cyclical Payments on Cash Rental Rates," 2018 Annual Meeting, August 5-7, Washington, D.C. 274116, Agricultural and Applied Economics Association.
    12. Coble, Keith H. & Barnett, Barry J., 2008. "Implications of Integrated Commodity Programs and Crop Insurance," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 40(2), pages 1-12, August.
    13. Hungerford, Ashley & Rosch, Stephanie, 2016. "The Effect of Crop Insurance Premium Subsidies on Soybean Producers' Risk Management Portfolios," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235341, Agricultural and Applied Economics Association.
    14. Taylor, Mykel R. & Tonsor, Glynn T. & Wilson, Candice, 2017. "Factors Affecting 2014 Farm Bill Commodity Program Enrollment for Kansas Farmers," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258190, Agricultural and Applied Economics Association.
    15. Severini, Simone & Tantari, Antonella & Di Tommaso, Giuliano, 2016. "The instability of farm income. Empirical evidences on aggregation bias and heterogeneity among farm groups," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 5(1), pages 1-19, April.
    16. Chalise, Lekhnath & Coble, Keith H. & Barnett, Barry J. & Miller, J. Corey, 2017. "Developing Area-Triggered Whole Farm Revenue Insurance," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 42(1), pages 1-18, January.
    17. Claassen, Roger & Bowman, Maria & Breneman, Vince & Wade, Tara & Williams, Ryan & Fooks, Jacob & Hansen, LeRoy & Iovanna, Rich & Loesch, Chuck, 2017. "Conservation Compliance: How Farmer Incentives Are Changing in the Crop Insurance Era," Economic Research Report 261814, United States Department of Agriculture, Economic Research Service.
    18. Gerlt, Scott & Westhoff, Patrick, 2013. "Analysis of the Supplemental Coverage Option," 2013 AAEA: Crop Insurance and the Farm Bill Symposium 156704, Agricultural and Applied Economics Association.
    19. Miao, Ruiqing & Khanna, Madhu, 2013. "Crop Insurance for Energy Grasses," 2013 AAEA: Crop Insurance and the Farm Bill Symposium 156936, Agricultural and Applied Economics Association.
    20. Dai, Jiawu & Feng, Yuchen & Wang, Yan & Wang, Xiuqing, 2022. "Agricultural support and spatial price transmission: evidence from China’s maize sector," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 26(2), November.

    More about this item

    Keywords

    Risk and Uncertainty;

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:uersrr:276229. 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: https://edirc.repec.org/data/ersgvus.html .

    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.