An Empirical Analysis of Acreage Effects of Participation in the Federal Crop Insurance Program

Abstract

The extent to which crop insurance programs have resulted in additional land being brought into production has been a topic of considerable debate. We consider multiequation structural models of acreage response, insurance participation, CRP enrollment, and input usage. Our analysis focuses on corn and soybean production in the Corn Belt and wheat and barley production in the Upper Great Plains. Our results confirm that increased participation in insurance programs provokes statistically significant acreage responses in some cases, though the response is very modest in every case. In the most extreme cases, 30% decreases in premiums as a result of increased subsidies provoke acreage increases ranging from 0.2% to 1.1%. A number of policy simulations involving increases in premium subsidies are considered. Copyright 2004, Oxford University Press.

Weather Index Insurance and Climate Change: Opportunities and Challenges in Lower Income Countries

“…56 Because individuals generally fail to take such low-frequency, high-severity events into 51 Skees (2001);Wu (1999). 52 Goodwin et al (2004);Skees (2001). 53 Buzby et al (1994).…”

Risks in the farms in Poland and their financing – research findings

“…More detailed analyses of demand for crop insurance, i.e. the factors which really affect the purchase of insurance and future demand forecasts are usually focused on other markets, mainly in the US [Coble et al 1996;Goodwin, Vandeveer, Deal 2004;Mishra, Goodwin 2003;Sherrick et al 2004;Garrido, Zilberman 2008;Ogurtsov, Van Asseldonk, Huirne 2009].…”

US Farm Policy and Risk Assistance

“…Several studies have found that insurance has a small, positive impact on production (Young, Vandeveer, and Schnepf, 2001;Goodwin, Vandeveer and Deal, 2004;Lubowski, et al, 2006). To illustrate the estimated production impacts, Lubowski, et al found that cultivated cropland in the 48 contiguous US states increased by 0.8 percent in 1997.…”