WHOLE FARM REVENUE INSURANCE AS A NEW MODEL OF CROP INSURANCE
Article Sidebar
Main Article Content
Abstract
Agricultural production is a specific area of business that is strongly influenced by natural, climatic, market, financial and institutional factors. These are all hazards not depending on the will of man and his activities, and it is necessary to foresee them and to insure against them. Crop and fruit insurance is the most effective risk management instrument in open field crop production. The aim of this paper is to present a new model of crop insurance which began to apply in 2015 in the United States. Every farm, by its implementation, provides farm’s expected total revenue that may be affected by the operation of both natural and climate risks, and market risks too, which are manifested through fluctuations in market prices. In this way all farm crops are insured against any risks with just one policy. Analyzed farm has experienced revenue loss due to drought, therefore it has indemnity right in the amount of 2,500 €. Premium costs amount to 330 €.
Downloads
Article Details
References
2. Bielza Maria and Garido A. (2009): Evaluating the potential of whole-farm insurance over crop specific insurance policies, Spanish Journal of Agricultural Research, Vol. 7, No.1: 3-11
Chalise, L., Coble, K. H., Barnett, B. J., & Miller, J. C. (2017). Developing Area-Triggered Whole Farm Revenue Insurance. Journal of Agricultural and Resource Economics, 42 (1): 27-44.
4. Dorfman M.S. (2007). Introduction to Risk Management and Insurance,ISBN13: 9780132242271, Prentice Hall, New Jersey: 2.
5. Hennessy, D. A., Babcock, B. A., & Hayes, D. J. (1997). Budgetary and producer welfare effects of revenue insurance. American Journal of Agricultural Economics, 79(3): 1024-1034.
6. Johnson, J. B., Hewlett, J., & Griffith, D. (2008). Adjusted Gross Revenue-Lite: A Whole Farm Revenue Insurance Available in Wyoming. Agricultural Marketing Policy Paper: 24
7. Kokot, Ž., Markovic, T., & Pajic, N. (2017). Risk management in crop production based on the regional index. Ratarstvo i povrtarstvo, 54(1): 13-18.
8. Markovic T. (2013): Vremenski derivati i upravljanje rizikom u poljoprivredi, Poljoprivredni fakultet, Novi Sad.
9. Petrevska M., Toscano B. and Milošev D. (2010): Osiguranje biljne proizvodnje, Bruno Toscano, Beograd.
10. Pejanovid, R., & Njegomir, V. (2011). Problemi upravljanja rizicima u poljoprivredi. Ekonomika poljoprivrede, 58(1): 91-103.
11. Shields, D. A. (2012). “Federal Crop Insurance for Specialty Crops: Background and Legislative Proposals.” CRS Report for Congress R42813, Congressional Research Service, Washington, DC. Available online at http://nationalaglawcenter.org/wp-content/uploads/assets/crs/R42813.pdf.
12. Shields, D. A. (2015). “Federal Crop Insurance: Background.” CRS Report for Congress R40532, Congressional Research Service, Washington, DC, 2015. Available online at http://www.fas.org/sgp/crs/misc/R40532.pdf.
13. Stokes, J. R., Nayda, W. I., & English, B. C. (1997). The pricing of revenue assurance. American Journal of Agricultural Economics, 79(2): 439-451.
14. Turvey, C. G. (2012). Whole farm income insurance. Journal of Risk and Insurance, 79(2): 515-540.
15. United States Department of Agriculture and Federal Crop Insurance Corporation (2016): Whole-Farm Revenue Protection Pilot Handbook, USDA, SAD.
16. United States Department of Agriculture and Federal Crop Insurance Corporation (2016): Whole-Farm Revenue Protection Pilot Policy, USDA, SAD.
17. Zhu, Y., Ghosh, S. K., & Goodwin, B. K. (2008, July). Modeling Dependence in the Design of Whole Farm Insurance Contract, A Copula-Based Model Approach. In annual meetings of the American Agricultural Economics Association, Orlando, FL: 27-29.
18. www.irs.gov
19. www.rma.usda.gov
20. www.ewebapp.rma.usda.gov
21. www.stat.gov.rs
22. www.proberza.co.rs