Purpose Recently, USDA-RMA introduced a Trend Adjusted-Actual Production History (TA-APH) program, which increases APH by a trend factor to cover yield changes over time. The purpose of this paper is to examine the effects of the TA-APH program on farmer participation, coverage election, and...

Purpose – The purpose of this paper is to investigate the effects of crop insurance premiums being determined by small samples of yields that are spatially correlated. If spatial autocorrelation and small sample size are not properly accounted for in premium ratings, the premium rates may...

Purpose – The purpose of this paper is to discuss the growth and rising costs association with the Federal Crop Insurance program in the USA, justifications for public support, and recent reforms that have been implemented or proposed to reduce program costs. It also analyzes a specific policy...

Purpose – The purpose of this paper is to provide empirical information about the past loss experience in major US crop insurance programs, and documents the impacts of ratings changes through time on the premiums and exposure to participants. The losses are also examined within the structure...

Purpose – The purpose of this paper is to investigate the demand for crop insurance. Moreover, farmer willingness to pay (WTP) for crop insurance was derived. Factors affecting the demand were also examined in a country where crop insurance products are not currently available. Sensitivity...

Purpose – The purpose of this paper is to examine a new insurance policy against natural disasters. Design/methodology/approach – The authors propose an optimisation model, which involves both the insurer and the farmer. The farmer decides to insure his farm if and only if insurance improves...

Crop insurance and pre-harvest pricing strategies were analyzed for “all years” and “years following a normal crop year” scenarios for the 1986 through 2001 period in three Indiana counties. Crop insurance products and early spring pre-harvest marketing generally had positive returns for...

A utility maximization model is used to assess alternative risk management portfolios of Pacific Northwest non-irrigated grain producers using three rotational practices. Risk management tools include hedging with wheat futures, yield insurance, two revenue insurance products (with and without...

Asymmetric information in the form of moral hazard and adverse selection can result in sizable program costs for government-provided crop insurance plans. We present a methodology and illustrative simulations to show how these two types of information problems interact in a way to create program...

Purpose – The purpose of this paper is to analyze the optimal reinsurance contract structure from the crop insurer's perspective. Design/methodology/approach – A very powerful and flexible empirical-based reinsurance model is used to analyze the optimal form of the reinsurance treaty. The...