Systemic weather risk is a major obstacle for the formation of private (nonsubsidized) crop insurance. This paper explores the possibility of spatial diversification of insurance by estimating the joint occurrence of unfavorable weather conditions in different locations. For that purpose copula...

This research investigates the potential effects of the row crop provisions of the standing disaster assistance program (SURE) in the 2008 Farm Bill. Results suggest little impact on producer crop insurance purchase decisions, though the program does seem to provide an incentive for mid-level...

This paper employs a cost function analysis method to investigate the existence of moral hazard in cotton buy-up insurance. The trans-log cost function estimates of the own-price elasticity of fertilizer, herbicide, and insecticide is -0.222, -0.143, and -0.121, respectively for Mississippi...

Yield variability can be significantly higher at the farm level than at more aggregated levels, including the county. However, due to a dearth of available farm level data, much stochastic analysis involving farm yields utilizes more aggregated yield data as a proxy for the farm level. We...

Previous studies identify limited potential efficacy of weather derivatives in hedging agricultural exposures. In contrast to earlier studies which investigate the problem at low levels of aggregation, we find using straight forward temperature contracts that better weather hedging opportunities...

Transitional yields based on county average can be used by producers as the basis to obtain crop insurance on fields that have not previously produced the crop. Using field-level crop insurance contract data for several crops in five different growing regions we examine the impact of this...

This paper investigates the role of reinsurance in the managing the liquidity or reserve fund risks facing a crop insurer. Using 31 years of data, combined with Monte Carlo simulation the paper illustrates a mechanism for calculating reinsurance premiums and determining the post insurance risk...

This paper analyses the optimal hedging decisions for risk-averse producers facing crop risk, assuming crop yield insurance futures and options can be used. The first-best optimal hedge requires a futures position or an option position proportionate to the individual beta depending on whether...

We estimate actuarially sound premium rates for individual yield guarantee and income protection crop insurance products for Georgia and South Carolina peaches. In most cases, the premium rate for an income protection product equals or exceeds the premium rate for an individual yield guarantee...

This paper investigates the relationship between weather events and agricultural risks. Specific event risks are defined by outcomes related to a specific event such as low temperature and rainfall. Using Ontario data this paper describes specific events and shows how these specific events can...