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Crop Insurance Savings Accounts: A Viable Alternative to Crop Insurance?

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  • Colson, Gregory
  • Ramirez, Octavio A.
  • Fu, Shengfei

Abstract

This research explores the viability of an alternative design for crop insurance based upon farmer-owned savings accounts that are regulated, monitored, and marginally assisted by the government. Such accounts could be an effective risk management tool for many farmers and could operate without major government subsidization. Relative to the current program, the proposed design should exhibit minimal moral hazard and adverse selection problems, and since farm-level risk does not have to be priced, the proposed design eliminates the premium rating difficulties that weaken actuarial soundness and trigger the need for substantial external subsidies. In addition, administrative costs should be considerably lower.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

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  • Colson, Gregory & Ramirez, Octavio A. & Fu, Shengfei, 2013. "Crop Insurance Savings Accounts: A Viable Alternative to Crop Insurance?," Faculty Series 146993, University of Georgia, Department of Agricultural and Applied Economics.
    • Handle: RePEc:ags:ugeocr:146993
    DOI: 10.22004/ag.econ.146993
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    References listed on IDEAS

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    1. Ramirez, Octavio A. & McDonald, Tanya U. & Carpio, Carlos E., 2010. "A Flexible Parametric Family for the Modeling and Simulation of Yield Distributions," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 42(2), pages 303-319, May.
    2. Sukant K. Misra & Jeannie Nelson, 2003. "Efficient Estimation of Agricultural Time Series Models with Nonnormal Dependent Variables," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 1029-1040.
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