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Safety Nets or Trampolines? Federal Crop Insurance, Disaster Assistance, and the Farm Bill

Published online by Cambridge University Press:  26 January 2015

Barry K. Goodwin  and
Roderick M. Rejesus
Barry K. Goodwin
Affiliation:
Department of Agricultural and Resource Economics, North Carolina State University, Raleigh, NC
Roderick M. Rejesus
Affiliation:
Department of Agricultural and Resource Economics, North Carolina State University, Raleigh, NC
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Abstract

We review the implications of the 2007 Farm Bill for the risk management dimensions of U.S. agriculture and policy. Legislative proposals suggest significant changes in risk management policy, including the introduction of state or national revenue insurance. We also pursue an empirical analysis of the interrelationships of crop insurance, disaster relief, and farm profitability. We find an inverse relationship between disaster assistance and insurance purchases. Our analysis also suggests that farmers that buy insurance and that receive disaster payments tend to have higher returns to farming.

Keywords

crop insurancedisaster paymentsFarm BillQ18
Type
Invited Paper Sessions
Information
Journal of Agricultural and Applied Economics , Volume 40 , Issue 2 , August 2008 , pp. 415 - 429
Copyright
Copyright © Southern Agricultural Economics Association 2008

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