Optimal Crop Insurance Under Climate Variability: Contrasting Insurer and Farmer Interests

Cabrera, V.E.; Solís, D.; Letson, D.

Optimal Crop Insurance Under Climate Variability: Contrasting Insurer and Farmer Interests

2009

Cabrera, V.E. | Solís, D. | Letson, D.

This study illustrates the potential synergies and conflicts of interest between farmers and insurers in the selection of an optimal crop insurance contract. Special attention is given to how climate information influences this decision-making process. To do so, we consider a representative 40 ha, rainfed, cotton-peanut farm located in Jackson County, Florida. Our results show that year-to-year El Niño Southern Oscillation (ENSO) based climate variability affects farmers' and insurers' net returns according to crop insurance contracts. Introduction of ENSO-based climate forecasts presents a significant impact on the selection of a particular contract to both the farmer and the insurer. We conclude that insurers and farmers can bridge their divergent interests by improving their understanding of the effect of climate conditions on the development of sustainable business plans.

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AGROVOC Keywords

arachis hypogaea cotton crop insurance decision making dryland farming el nino farmers florida gossypium hirsutum peanuts risk management weather forecasting

Bibliographic information

Published in

Transactions of the ASABE

Publisher

John Wiley & Sons, Ltd

Pagination

p. 623-631.

Other Subjects

Crop insurance contracts; Insurers; Costs and returns; Meteorology and climatology; Plant production (field crops); Farm organization and management (microeconomics); Crop insurers

Language

English

Type

Monographic; Text; Journal Article

In AGRIS since: 2024-02-29

Format: MODS

Data Provider

This bibliographic record has been provided by National Agricultural Library

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Links

http://asae.frymulti.com/toc_journals.asp?volume=52&issue=2&conf=t&orgconf=t2009

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