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Agricultural Insurance as an Environmental Policy Tool

Published online by Cambridge University Press:  28 April 2015

Keith H. Coble ,
Terry Hanson ,
J. Corey Miller  and
Saleem Shaik
Keith H. Coble
Affiliation:
Department of Agricultural Economics, Mississippi State University, Mississippi State, MS
Terry Hanson
Affiliation:
Department of Agricultural Economics, Mississippi State University, Mississippi State, MS
J. Corey Miller
Affiliation:
Department of Agricultural Economics, Mississippi State University, Mississippi State, MS
Saleem Shaik
Affiliation:
Department of Agricultural Economics, Mississippi State University, Mississippi State, MS
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Abstract

This paper examines the possibility that insurance for row crops, livestock, and aquaculture can be used effectively to encourage producers to adopt practices that will improve environmental behavior. Examples of agricultural environmental insurance are provided and considered in the context of alternative policy mechanisms. The current state of agricultural insurance and the nonagricultural environmental insurance market are explored. We also lay out the characteristics of an insurable risk along with the theoretical basis of insurance provision. An empirical example of an environmental insurance design is provided, and the behavioral implications of such a design are examined. Finally, we discuss important considerations that should be evaluated when considering an attempt to implement an agricultural insurance program directed at environmental behavior.

Keywords

environmentinsuranceliabilityD81G22H23K13Q18
Type
Invited Paper Sessions
Information
Journal of Agricultural and Applied Economics , Volume 35 , Issue 2 , August 2003 , pp. 391 - 405
Copyright
Copyright © Southern Agricultural Economics Association 2003

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