The Growth Of The Federal Crop Insurance Program, 1990–2011

Glauber, Joseph W.

doi:10.1093/ajae/aas091

Cited by 147 publications

(103 citation statements)

References 6 publications

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“…The second factor is the increase in the crop loss replacement rate. Glauber (2012) notes that in 1998 only 9 percent of insured acres were enrolled at coverage levels above 70 percent of loss replacement, whereas 70 percent of insured acres were enrolled at loss replacement levels above 70 percent in 2011. Recall that the Agriculture Risk Protection Act of 2000 added $8.2 billion in new federal spending over a five-year period to the program primarily through more generous premium subsidies.…”

Section: Economic Losses and Insurancementioning

confidence: 99%

Disasters in the United States: Frequency, Costs, and Compensation

Brusentsev¹,

Vroman²

2017

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Section: Economic Losses and Insurancementioning

confidence: 99%

Disasters in the United States: Frequency, Costs, and Compensation

Brusentsev¹,

Vroman²

2017

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“…Despite the fact that several experts consider crop insurance an inefficient management tool (Glauber & Joseph, 2013;Wright, 2014), it has expanded in recent years into many developed and developing countries (Bielza et al, 2008). Meteorological drought risk has traditionally been considered as a non-insurable risk because of its systemic character, which means that large losses are registered contemporaneously over vast areas (Pérez & Gómez, 2014).…”

Section: Insurance Design and Contract Conditionsmentioning

confidence: 99%

Dealing with drought in irrigated agriculture through insurance schemes: an application to an irrigation district in Southern Spain

Ruiz

Bielza

Garrido

et al. 2015

Span. j. agric. res.

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Hydrological drought is expected to have an increasing impact on both crop and fruit yields in arid and semi-arid regions. Some existing crop insurance schemes provide coverage against water deficits in rain-fed agriculture. The Prevented Planting Program in the USA covers against drought for irrigated agriculture. However, drought insurance for irrigated agriculture is still a challenge for companies and institutions because of the complexity of the design and implementation of this type of insurance. Few studies have attempted to evaluate the risk of loss due to irrigation water scarcity using both stand-alone production functions and crop simulation models. This paper's contributions are that it evaluates the suitability of AquaCrop for calculating drought insurance premiums for irrigated agriculture and that it discusses contract conditions and insurance design for hydrological drought risk coverage as part of a traditional insurance product, with on-field loss assessment in combination with a trigger index. This method was applied to an irrigation district in southern Spain. Our insurance premium calculation showed that it is feasible to apply this method provided that its data requirements are met, such as a large enough set of reliable smallscale yield and irrigation time series data, especially soil data, to calibrate AquaCrop. The choice of a trigger index should not be underestimated because it proved to have a decisive influence on insurance premiums and indemnities. Our discussion of the contract conditions shows that hydrological drought insurance must comply with a series of constraints in order to avoid moral hazard and basis risk.Additional key words: crop insurance; hydrological drought; AquaCrop; trigger index. This work has one supplementary table published online alongside the electronic version of the article.

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“…In particular, the high variability of weather is of relevance for agricultural producers, encouraging the development of efficient risk management tools. In this context agricultural insurance schemes traditionally play a major role in many countries (Glauber 2013). To overcome problems caused by asymmetric information associated with indemnity-based insurance solutions, index insurance products have been suggested as an alternative (Turvey 2001).…”

Section: Introductionmentioning

confidence: 99%

Can Gridded Precipitation Data and Phenological Observations Reduce Basis Risk of Weather Index–Based Insurance?

Dalhaus

Finger

2016

Weather, Climate, and Society

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Adverse weather events occurring at sensitive stages of plant growth can cause substantial yield losses in crop production. Agricultural insurance schemes can help farmers to protect their income against downside risks. While traditional indemnity-based insurance schemes need governmental support to overcome market failure caused by asymmetric information problems, weather index–based insurance (WII) products represent a promising alternative. In WII the payout depends on a weather index serving as a proxy for yield losses. However, the nonperfect correlation of yield losses and the underlying index, the so-called basis risk, constitutes a key challenge for these products. This study aims to contribute to the reduction of basis risk and thus to the addition of risk-reducing properties of WII. More specifically, the study tests whether grid data for precipitation (vs weather station data) and phenological observations (vs fixed time windows for index determination) that are provided by public institutions can reduce spatial and temporal basis risk and thus improve the performance of WII. An empirical example of wheat production in Germany is used. No differences were found between using gridded and weather station precipitation, whereas the use of phenological observations significantly increases expected utility. However, even if grid data do not yet reduce basis risk, they enable overcoming several disadvantages of using station data and are thus useful for WII applications. Based on the study’s findings and the availability of these data in other countries, a massive potential for improving WII can be concluded.

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The Growth Of The Federal Crop Insurance Program, 1990–2011

Cited by 147 publications

References 6 publications

Disasters in the United States: Frequency, Costs, and Compensation

Disasters in the United States: Frequency, Costs, and Compensation

Dealing with drought in irrigated agriculture through insurance schemes: an application to an irrigation district in Southern Spain

Can Gridded Precipitation Data and Phenological Observations Reduce Basis Risk of Weather Index–Based Insurance?

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