Researchers from U.S. Department of Agriculture (USDA) Detail Findings in Crop Insurance (The Crop Insurance Demand Response To Premium Subsidies: Evidence From Us Agriculture): Agriculture – Crop Insurance

2023 SEP 08 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Investigators discuss new findings in Agriculture - Crop Insurance. According to news reporting out of Kansas City, Missouri, by NewsRx editors, research stated, “Premium subsidies are a common policy tool to promote crop insurance participation in many countries. However, the relationship between subsidies and demand is not entirely obvious given the variation in the use of subsidies and crop insurance participation within the international crop insurance landscape.”

Financial support for this research came from United States Department of Agriculture (USDA).

Our news journalists obtained a quote from the research from the U.S. Department of Agriculture (USDA), “Focusing on the U. S. Federal Crop Insurance Program (FCIP) demand is modeled as a system of equations representing decisions at the intensive [coverage level] and extensive [net insured acres] margins. The model makes use of an identification strategy that leverages exogenous variation in government-set pricing policy to address potential sources of endogeneity. Applying the model to over one million insurance pool level FCIP observations spanning two decades (2001-2022) suggest an inelastic response at both extensive and intensive margins to changes in producer-paid premium rates with the response to premium rates becoming increasingly more elastic as subsidies decrease.”

According to the news editors, the research concluded: “These estimated elasticities are on the low end compared to previous literature, however, significant heterogeneity across commodity, production practices, policy type, and location are observed suggesting subsets of producers are likely to respond to changes in the cost of insurance in different ways.”

This research has been peer-reviewed.

For more information on this research see: The Crop Insurance Demand Response To Premium Subsidies: Evidence From Us Agriculture. Food Policy, 2023;119. Food Policy can be contacted at: Elsevier Sci Ltd, The Boulevard, Langford Lane, Kidlington, Oxford OX5 1GB, Oxon, England. (Elsevier - www.elsevier.com; Food Policy - http://www.journals.elsevier.com/food-policy/)

Our news journalists report that additional information may be obtained by contacting Francis Tsiboe, USA. Dept. of Agriculture (USDA), Economic Research Service, 805 Penn Ave, Kansas City, MO 64105, United States.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.foodpol.2023.102505. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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