Campus Units

Economics

Document Type

Article

Publication Version

Published Version

Publication Date

2012

Journal or Book Title

Journal of Agricultural and Resource Economics

Volume

37

Issue

3

First Page or Article ID Number

415

Last Page

434

Abstract

A framework is developed to examine organic crop insurance established by the Risk Management Agency (RMA). Given that the RMA links organic and conventional crop prices, the model is calibrated to reflect both markets to illustrate the impacts that pricing has on insurance coverage. Findings indicate that at the 75% coverage level, the RMA's fixed-price factor implies an effective coverage ranging from 43% to 105% depending on the ratio of planting-time organic to conventional market prices. Results suggest the RMA's program is likely to induce adverse selection because the nominal coverage level is likely to deviate substantially from the effective coverage.

Comments

This article is from Journal of Agricultural and Resource Economics 37 (2012): 415. Posted with permission.

Copyright Owner

Western Agricultural Economics Association

Language

en

File Format

application/pdf

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