Get a GRIP: Should Area Revenue Coverage Be Offered through the Farm Bill or as a Crop Insurance Program?

dc.contributor.author Paulson, Nicholas
dc.contributor.author Babcock, Bruce
dc.contributor.author Babcock, Bruce
dc.contributor.department Center for Agricultural and Rural Development
dc.date 2018-02-16T16:32:35.000
dc.date.accessioned 2020-06-30T01:05:09Z
dc.date.available 2020-06-30T01:05:09Z
dc.date.embargo 2015-07-03
dc.date.issued 2007-01-01
dc.description.abstract <p>The successful expansion of the U.S. crop insurance program has not eliminated ad hoc disaster assistance. An alternative currently being explored by members of Congress and others in preparation of the 2007 farm bill is to simply remove the “ad hoc” part of disaster assistance programs by creating a standing program that would automatically funnel aid to hard-hit regions and crops. One form such a program could take can be found in the area yield and area revenue insurance programs currently offered by the U.S. crop insurance program. The Group Risk Plan (GRP) and Group Risk Income Protection (GRIP) programs automatically trigger payments when county yields or revenues, respectively, fall below a producer-elected coverage level. The per-acre taxpayer costs of offering GRIP in Indiana, Illinois, and Iowa for corn and soybeans through the crop insurance program are estimated. These results are used to determine the amount of area revenue coverage that could be offered to farmers as part of a standing farm bill disaster program. Approximately 55% of taxpayer support for GRIP flows to the crop insurance industry. A significant portion of this support comes in the form of net underwriting gains. The expected rate of return on money put at risk by private crop insurance companies under the current Standard Reinsurance Agreement is approximately 100%. Taking this industry support and adding in the taxpayer support for GRIP that flows to producers would fund a county target revenue program at the 93% coverage level.</p>
dc.identifier archive/lib.dr.iastate.edu/card_workingpapers/479/
dc.identifier.articleid 1459
dc.identifier.contextkey 7288630
dc.identifier.s3bucket isulib-bepress-aws-west
dc.identifier.submissionpath card_workingpapers/479
dc.identifier.uri https://dr.lib.iastate.edu/handle/20.500.12876/12830
dc.source.bitstream archive/lib.dr.iastate.edu/card_workingpapers/479/07wp440.pdf|||Sat Jan 15 00:26:25 UTC 2022
dc.subject.disciplines Agricultural and Resource Economics
dc.subject.disciplines Agricultural Economics
dc.subject.disciplines Economic Policy
dc.subject.disciplines Finance
dc.subject.keywords area revenue insurance
dc.subject.keywords commodity programs
dc.subject.keywords crop insurance
dc.subject.keywords Group Risk Income Protection
dc.title Get a GRIP: Should Area Revenue Coverage Be Offered through the Farm Bill or as a Crop Insurance Program?
dc.type article
dc.type.genre article
dspace.entity.type Publication
relation.isAuthorOfPublication be977ffd-4ef3-4f33-a854-9db833e957f4
relation.isOrgUnitOfPublication 1a6be5f1-4f64-4e48-bb66-03bbcc25c76d
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