Please use this identifier to cite or link to this item: https://hdl.handle.net/1959.11/6483
Title: Market-Based Crop Insurance Appraisal Using Whole-Farm Planning
Contributor(s): Van Asseldon, MAPM (author); Kobzar, OA (author); Meuwissen, MPM (author); Huirne, RBM (author); Hardaker, John Brian (author)
Publication Date: 2006
Handle Link: https://hdl.handle.net/1959.11/6483
Abstract: This paper is a study of the viability of market-based crop insurance using whole-farm planning. Utility-efficient programming (UEP) is used to determine demand on the basis of transaction costs and level of farmer's risk aversion. Farm-level data for the utility-efficient programming model were derived from a panel data set for specialised arable farms in the Netherlands. The data included information about the stochastic structure of yields and prices as well as other physical and financial parameters. The UEP results indicated under which conditions farmers were likely to participate. The results showed that the degree of risk aversion affected the optimal choice to retain yield risk or to transfer the risk by means of an insurance contract. Although the viability of market-based crop insurance is partly conditional upon the (currently uncertain) transaction costs, the fact that farmers under study were relatively wealthy reduces the chances of any substantial demand for such a market-based product. Alternative risk-coping options, such as use of credit to enhance farm-firm liquidity in adverse years, are likely to dominate a commercial crop insurance risk strategy.
Publication Type: Conference Publication
Conference Name: 86th EAAE (European Association of Agricultural Economists) Seminar - 'Agricultural Income Stabilization: what role should public policies play?', Anacapri, Italy, 21st - 22nd October, 2004
Conference Details: 86th EAAE (European Association of Agricultural Economists) Seminar - 'Agricultural Income Stabilization: what role should public policies play?', Anacapri, Italy, 21st - 22nd October, 2004
Source of Publication: Income Stabilization In Agriculture. The Role of Public Policies: Proceedings of the 86th EAAE Seminar - 'Agricultural Income Stabilization: what role should public policies play?', p. 409-417
Publisher: Edizioni Scientifiche Italine
Place of Publication: Napoli, Italy
Field of Research (FOR): 140201 Agricultural Economics
Socio-Economic Outcome Codes: 919999 Economic Framework not elsewhere classified
HERDC Category Description: E2 Non-Refereed Scholarly Conference Publication
Other Links: http://www.ceigram.upm.es/contenidosweb/documentos/20080822073735_1_Naples-101-116.pdf#page=419
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